Facebook gets a reality check on IPO day

Once protected by the hype bubble, Facebook is getting a hard lesson in the realities of the public markets.

Despite the massive build-up to its IPO, the market response has been more tepid than expected. “We are seeing the stock hit reality like a brick wall,” said GreenCrest Capital senior managing analyst Anupam Palit. Facebook’s scale and engagement might have pushed its valuation to $100 billion, but, like every other public company it’s not immune to the larger economic trends. Palit said he expected Facebook’s first day to be less dramatic than that of its public tech peers (like LinkedIn, Pandora and Groupon, which all saw a first-day pop of at least 30 percent), but added that today was “definitely more muted” than anticipated. Still, he said that Facebook’s performance was generally positive considering that “the guys who have flown really high on their IPO have tumbled in subsequent weeks.” Also, while first-day retail interest in other tech stocks had been essentially nonexistent, Palit said, retail buyers were much more interested in Facebook.