Tuesday, May 29, 2012

Why is Facebook's IPO called a failure?

So Facebook's share price closed about 15% lower than what it was offered at. Google's share price closed about 15% higher than what it was offered at. Yet while Google was business as usual, facebook is considered a monumental flop (Ok facebook has dropped more since then) but still I find it odd that IPOs are presumed to be underpriced, when it seems a more reasonable presumption is that if markets were efficient, IPO mispricings should be normally distributed around around zero.
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