Banks Spent $66 Million Buoying Facebook IPO, Fed Economists Say

Facebook’s underwriters may have spent an estimated $66 million supporting the stock’s price in the first day of trading after the company’s initial public offering, Federal Reserve Bank of New York economists said. The underwriters of Facebook’s IPO probably put in bids at $38 and $40 per share as the stock threatened to fall below the $38 offer price during the May 18 trading debut, according to a blog post by economists Thomas Eisenbach and David Lucca. The cost of supporting the stock probably eroded about 40 percent of the underwriting commissions Facebook paid banks to take it public,

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