[dbkbali]

There is another possibility and that is dealers were desperately trying to maintain facebooks price above the Ipo price, especially given the significant lower fees taken on this Ipo and the greenshoe option. Without this dealer intervention it is possible facebooks price would have correlated more with zynga's price short. The greenshoe option http://en.wikipedia.org/wiki/Greenshoe could also have something to do with these trading patterns. Given facebooks stock performance this is not positive for future Internet IPOs.

[mikeryan]

There is another possibility and that is dealers were desperately trying to maintain facebooks price above the Ipo price, especially given the significant lower fees taken on this Ipo and the greenshoe option. Without this dealer intervention it is possible facebooks price would have correlated more with zynga's price short.

um, they said that in the article.

[tatsuke95]

This isn't a "possibility", it's the duty of the underwriter.

[dbkbali]

The underwriter has no legal obligation or "duty" to guarantee or support the original issue price. Definitely, they have an economic and business incentive to ensure the price stays above the issue price. Failure to keep the IPO above this price could lead to a loss of credibility with their large institutional buyers and also with the issuer and their participation in future IPOs.