Facebook's Volume Is On Track To Set A New US IPO Record

Date : 05/18/2012 @ 1:30PM
Source : Dow Jones News
Stock : Citigroup, Inc. (C)
Quote : 59.44  1.72 (2.98%) @ 4:01PM

Facebook's Volume Is On Track To Set A New US IPO Record

Facebook (NASDAQ:FB)
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Facebook Inc. (FB) kicked off its first day of trading with a burst of activity--more than 200 million shares changed hands in the first hour--putting it on track to be the most heavily traded U.S. IPO ever by day's end.

Market watchers will be keeping an eye on the final volume figure for Facebook, which had its initial public offering on Friday, after markets close at 4 p.m. The current holder of the record for most shares changing hands in a single day is Citigroup Inc. (C), which saw 3.8 billion shares trade on Dec. 17, 2009. That was in the depths of the financial crisis, when panic selling was rampant and Citi was at $31.50, in the middle of a fall from its 2007 highs of more than $500.

The record for most shares traded on the day of an IPO is held by General Motors Co.' (GM), at 458 million. Facebook is poised to beat those levels easily, which would be a shot in the arm to trading desks that have been seeing anemic volumes all year.

Facebook accounted for 5.6% of the total U.S. stock market volume at noon. The major U.S. markets had seen 3.9 billion shares of stock trade.

This injection of volume came as a welcome boost, if just for the short term, for what many see as anemic trading in the U.S. stock market.

The first quarter of 2012 saw the lowest average volume since 2007; it fell 14.5% from the same quarter the prior year. Last month was better, but not by much. April trading volume fell 7.6% year-over-year, according to Credit Suisse Trading Strategy.

One contributing factor to low volume is that the market has seen fewer initial public offerings. IPO levels are roughly one-sixth of where they were in the 1990s, according to Credit Suisse. And, according to data from Ipreo Capital Markets, they are still in decline. Deals fell year-over-year for the January-through-April period. Last month saw $3.9 billion raised in nine deals, down from the $5.6 billion raised by 20 deals in April 2011.

However, Facebook's offering should juice the May figure. Thanks to that deal, the month will show the first monthly increase in IPO proceeds this year. In the first weeks of May, 12 IPOs have raised $18.6 billion. Last year, for the entire month of May, 21 IPOs raised $6.9 billion.

-By Alexandra Scaggs, Dow Jones Newswires; 212-416-4125; alexandra.scaggs@dowjones.com




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