Behind the Money

Facebook Brings the Retail Investor Back … for a Day

Brendan Smialowski | AFP | Getty Images

Facebook caused a surge in trading volume as the hype surrounding the biggest Internet IPO ever lured regular investors back to their electronic brokerages to trade shares of the ultra-popular social network — and the rest of the market, too.

Retail participation in the overall market — rather than by institutions — was 50 to 70 percent higher than the average for May, estimated Richard Repetto, an exchange and brokerage analyst with Sandler O’Neill.

A large portion of that trading was in Facebookshares alone as Repetto said a large electronic broker told him that the new IPO accounted for as much as 30 percent of the daily average revenue trades — or “DARTS” as they are called in the industry.

By comparison, the previous best IPO was GM, accounting for 7 percent of DARTS, according to this broker.

It will be a welcome sight for Wall Street if Facebook can keep the retail investor interested in the stock market beyond one trading day.

Even with the bull market turning three years old in March, equity mutual funds have averaged $274 million in outflows per week this year, according to Jefferies.

Shares of the social network ended the day slightly higher than the IPO price but it was the volume stats that were impressive.

About 570 million shares traded in the ticker "FB," accounting for a fifth of the total volume at the Nasdaq.

It was that exchange’s busiest day so far this year.

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