Mark Zuckerberg rings the opening bell of the Nasdaq stock market from Facebook headquarters in California. (AP Photo)
Times Square visitors react as Facebook CEO Mark Zuckerberg is shown on giant monitors, as the company's stock is set to begin trading on the ...
Robert McCooey, Nasdaq Senior vice president for New Listings and Capital Markets, watches electronic screens during the IPO for Facebook at Nasdaq in New York. ...
Facebook co-founder Mark Zukerberg is seen on a screen getting ready to ring the Nasdaq stock exchange opening bell in Times Square in New York. ...
Students walk into Kirkland House on the campus of Harvard University in Cambridge. AP/Elise Amendola
A man takes a picture of a monitor shows a welcoming message for Facebook's listing on the Nasdaq Marketsite prior to the opening bell in ...
The electronic screen on the front of the Nasdaq stock market announces the listing of Facebook shares that begin trading in New York. AP/Mark Lennihan
Xavier Schmidt of Menlo Park, has his picture taken by his parents outside Facebook's headquarters in Menlo Park, California, the night before the company's IPO ...
News vans park outside Facebook's headquarters in Menlo Park, California, the night before the company's IPO launch. Reuters/Beck Diefenbach
Is Facebook allowing dissemination of child pornography? AFP/Justin Sullivan
Facebook Inc shares rose less than expected on their first day of trade on Friday and huge order volume caused technical problems that marred the coming out party of the No 1 online social network.
Its shares were up 8% in early afternoon trading on the Nasdaq, after opening 11% higher and then rapidly heading south to touch their initial public offering price of $38. The gains were below market forecasts of as much as a 50% jump.
"We have got some unhappy guys out there," said Wayne Kaufman, chief market strategist at John Thomas Financial, a retail broker on Wall Street.
"They were hoping for Facebook to be considerably better. I bet there are a lot of disappointed people in the market."
Facebook, which has about 900 million users globally, priced its IPO at the top end of its target range, becoming the first US company to go public with a valuation greater than $100 billion.
If a greenshoe option to underwriters is exercised, Facebook will raise as much as $18.4 billion by selling an 18% stake, the second-biggest IPO in US history after the one by Visa Inc.
Analysts blamed the poorer-than-expected first-day showing on the vast number of shares floated and market weakness. General Motors' decision to pull paid-advertising from the social network, announced this week, also hurt.
After a delay in the opening print that drove up anxiety levels among traders and onlookers outside the Nasdaq, the closely watched stock began trading at $42.05, rose to as high as $45 and then rapidly retreated. The Nasdaq exchange said it was investigating an issue with execution of trades.
Facebook's IPO had been heavily oversubscribed, particularly by retail investors, despite concerns about slowing growth in the last quarter, whether the company can make money from mobile advertising, and the immense control Chief Executive Mark Zuckerberg has over on the company.
Others warned that the IPO price, equivalent to over 100 times historical earnings versus Apple Inc's 14 times and Google Inc's 19 times, makes Facebook a risky bet.
For Facebook, Friday began with much fanfare. To rapturous applause from employees, Mark Zuckerberg -- flanked by chief operating officer Sheryl Sandberg and Nasdaq chief executive Robert Greifeld -- rang the bell to kick off trading at the company's Silicon Valley headquarters at 6:30am Pacific time.
The 28-year-old billionaire founder, wearing his trademark black hoodie, hugged and high-fived Sandberg and other employees in celebration after he pressed the remote button.
The area outside Facebook's offices was packed with throngs of photographers, more than a dozen television trucks, and a TV news helicopter hovering overhead as the excitement reached fever pitch.
The fizzling of Facebook's early gains put pressure on other social media stocks.
Zynga, which depends on Facebook for much of its revenue, dived 13% before it was halted. LinkedIn Corp was off 3% at midday.
"When you see what's happening with other social media stocks today, which are significantly down, as well as looking at Facebook trading flat, we think it has traded obviously at the high end," said Destination Wealth Management CEO Michael Yoshikami.
"It's a rich valuation, particularly given the advertising pressure they're under now. Advertising revenue has grown significantly slower over the past few years, and that's punctuated by GM's decision to stop advertising on Facebook."
"We're not buyers at $38, particularly considering that most of their business is in mobile and they haven't figured out how to make money yet."