Typically, IPOs on the Nasdaq start trading after the start of the market. The exchange tells traders that it expects Facebook shares to begin trading at 11 a.m. They don't. Finally, around 11:30 a.m., shares begin trading furiously – more than 80 million in the first 30 seconds. The stock quickly soars above $42, then they fall back again. Complaints begin surfacing that orders aren't being completed – or are selling at unexpected prices.
By midday, Facebook falls back to its opening price – a big embarrassment for such a high-profile stock. Morgan Stanley and other underwriters pour in buy orders and successfully keep the stock from falling below $38. Ironically, it turns out to be one of the few profitable Facebook trades. When the share price recovers in the last hour, the underwriters reportedly make about $100 billion – in addition to their underwriting fees.
Another winner: Facebook CEO Mark Zuckerberg, who sells 30.2 million shares at $37.58 apiece, earning him $1.1 billion, most of which will be spent on taxes, according to an SEC filing. He retains 503.6 million shares.
Shares of Facebook end the day only slightly above where they started: $38.23.
The following Monday, Nasdaq blames Friday's trading delay on a technical glitch, which it says was caused by many traders submitting changes to their orders before the opening trading began. The exchange switched to another system to get trading started, but some orders during that switchover didn't go through – or were filled later in the day at a different price. Days later, some investors still aren't sure how many Facebook shares they own or at what price. Nasdaq offers to reimburse affected investors. So does Morgan Stanley.