The most overhyped initial public offering (IPO) in the history of mankind is officially in a bear market.
Facebook shares (FB) have already sunk close to 30% to under $28 per share from their $45 peak. It’s hardly the trading start most folks, including company insiders and underwriters, envisioned.
Yet, despite Facebook’s poor debut, the Select Sector Technology SPDR ETF (XLK) had risen over 15% in April and continues to be up more than 5% for past six months (vs. about 2.5% for the S&P 500). It’s one of the S&P 500’s top-performing industry sectors. Top holdings within XLK include Apple, Cisco Systems, and Microsoft.
The Nasdaq Composite was up about 9% on May 31. Other technology indicators like the Nasdaq-100 have been ahead by more than 11.5% in the past few weeks.
How weak was the social networking giant’s IPO debut? It was so bad, that lead underwriter Morgan Stanley (MS) was forced to buy up FB shares to prevent them from dipping below its $38 offer price. The Wall Street Journal described Morgan Stanley (MS) as Facebook’s “stabilization agent.”