Update: Facebook IPO stumbles out of the gate

Computerworld - The frenzy that had surrounded Facebook's initial public offering quickly cooled after trading started today and the company's stock ended the day flat.

The Nasdaq market closed with Facebook trading at $38.23, only slightly above its opening share price of $38. The stock had opened the day at around $42 a share, but quickly began to waver, dropping and rebounding through most of the afternoon.

However, just 10 minutes before close of the market at 4 p.m. ET, the stock began to sink, even dipping below $38 per share. It recovered at the last minute to close just above.

While Facebook was able to maintain its opening price, it did not meet many of the lofty expectations that envisioned the stock rocketing to $50, $60 or even $90 a share on its opening day. For that, Wall Street and investors were left wanting.

I think its very disappointing, said Zeus Kerravala, an analyst with ZK Research. People thought this was going to be the most successful IPO of all time. Its not a bad IPO. It opened at $38, which is good and it stayed there. Trouble is, people were expecting more.

"Some of the problem may have been all the hype," he said. "Investors tend to stay away from hype.

According to the Wall Street Journal, Facebook did manage to make history, setting a record for trading volume for any IPO. More than 460 million shares of the social network were traded.

The first hours of the social networking company's IPO got off to a shaky start today with the share price wavering around the $40 mark, never gaining the astronomical momentum that had been anticipated by many. Shortly after 2 p.m. ET, the stock price was hovering just under $41, less than $3 above its initial share price.

"It's certainly not flying to unprecedented levels," said Kerravala. "This underscores the thesis that many investors are taking a wait-and-see approach."

He added that while many people may be surprised Facebook's stock price hasn't taken off yet, they really shouldn't be.

"I think it's surprising a lot of people, but I think it should have been expected," said Kerravala. "There are a lot of questions about Facebook.... How are they going to monetize mobile? Can [CEO Mark] Zuckerberg run a public company?"

Twenty-eight year-old Zuckerberg started the day by ringing the Nasdaq opening bell from company headquarters in Menlo Park, Calif.

After that, though, there were a few hitches.

Trading was supposed to start at 11 a.m. ET, but the Nasdaq delayed it by about half an hour in order to handle the flood of buy and sell orders that were coming through for Facebook's stock.