They haven't? They should, particularly if you bought some of the newly public shares from Facebook's initial public offering (IPO) 11 days ago. The stock, expected to be offered in the low $30s, came to market on May 18 at $38/share, and popped up to $45 on opening day before settling down . . . way down, in fact, closing at $28.84 today. The press and other commentators have roundly derided Facebook's IPO as a failure because the stock has gone down instead of up. A successful IPO, they say, is one where the stock goes up smartly above the offering price. A company called Splunk (traded as SPLK), for example, went public in April at $17/share and is now trading at $36.
That makes the offering a success for the lucky souls whose brokers allot some of the shares to them, and for the investment banks that don't let their shares out to the buyers at once, but a failure for the company and its owners. Take Splunk, for example. The sellers and the company received $17/share for something that the market was willing to pay $30 or more for. (Since going public last month, the stock has never traded below $28.) Although the Splunk offering is hailed as a success, if you were one of the Splunk sellers, or the company itself, it was a huge failure -- the company received about 40% less for its stock than the market was willing to pay.
By contrast, the Facebook sellers received top dollar for their merchandise.
A failure, or a success? It depends on which side of the table you're sitting.