When Facebook first began selling shares of stock to the public, the price for its initial public
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When Facebook first began selling shares of stock to the public, the price for its initial public offering (IPO) was $38 per share. After a few days of trading, the price fell to $20 per share. An article in the Wall Street Journal quotes an investment analyst as explaining why demand for Facebook’s IPO was initially so high but then collapsed: “The mass psychology of this IPO was that of a classic mania.”
Is this analyst’s assessment consistent with behavioral finance? Briefly explain. Is it consistent with the efficient markets hypothesis? Briefly explain.
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The investment analysts assessment that the demand for Facebooks IPO exhibited characteristics of a ...View the full answer
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Related Book For 
Money Banking And The Financial System International Edition
ISBN: 978-1292000183
2nd Edition
Authors: R. Glenn Hubbard ,Anthony P Obrien
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