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Massive bank buyout saved Facebook embarrassment of stock dipping below starting price

      Social networking giant Facebook narrowly avoided the embarrassment of its stock dipping below the 38 dollar a share starting price because the banks advising it stepped in to buy. The sale got off to a messy and inauspicious start. The start of trading in New York was marred by a 30-minute delay that left the stock exchange Nasdaq embarrassed amid confusion among investors over whether trades had been processed. After finally coming on stream the shares briefly surged by almost 20 percent, only to fall back to their 38 dollar initial offer price as a widely expected glut of demand was offset by the weight of those selling, The Telegraph reports. According to the report, analysts speculated that Facebook's army of bankers had stepped in to stop the shares falling below 38 dollars a share, a move that would have landed the social network with a public relations disaster on its first day as a public company. Retail investors were among the biggest buyers after Facebook limited their share of the flotation to just 15percent of the 421million shares sold. "Emotion rather than the company's fundamentals are going to be driving the shares over the next few days," the paper quoted said Arvind Bhatia, an analyst at Sterne Agee, as saying. According to the report, analysts said that the shares might have failed to spark in the same way as previous high-profile tech IPOs because underwriters were too aggressive in pricing the deal.

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