Facebook filed for an initial public offering (IPO) on February 1, 2012. This highly anticipated IPO was overwhelmed with problems costing thousands of dollars to many small investors and further damaging Wall Street’s reputation. The following video report from The Wall Street Journal explains Facebook IPO debacle in simple English.
The stock price was set at $38 each. Its estimated that retail investors may have lost approximately $630 million on Facebook stock since its debut. Trading in the stock, which began on May 18, was delayed that day due to technical problems with the NASDAQ exchange. The stock struggled to stay above the IPO price for most of the day, forcing underwriters to buy back shares to support the price.
Watch the Wall Street Journal report for more details: