Behind the Drama of Facebook's IPO

It was one of the most highly-anticipated coming-out parties in Wall Street history.

Mark Zuckerberg
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Mark Zuckerberg

On May 18, a hoodie-clad Mark Zuckerberg stood in front of a crowd of thousands outside his Menlo Park headquarters to ring in Nasdaq’s opening bell — a moment which officially welcomed Facebook and its brash and disruptive management team to the pantheon of Wall Street’s tech stars.

Up to that point, the perception among many on Wall Street and in the media was that Facebook, along with the dozens of banks overseeing its transition to a public company — including lead underwriters Morgan Stanley , JPMorgan and Goldman Sachs— had run a near-perfect offering. Despite a few hiccups and lingering concerns about mobile growth, the social giant had managed to pull off the largest internet IPO in history, raising some $16 billion dollars at a valuation of more than $100 billion. It was a remarkable feat. There was nowhere to go but up.

But just after 11 a.m. — the time Nasdaq had previously scheduled shares to start trading — system issues at the exchange began to mishandle Facebook trading orders, and everything changed.

Sparked by a disastrous open day of trading, scratches on the surface (about valuation, growth, long-term viability, competition, and price) became gaping wounds. Smelling blood in the water, sellers poured in, and when underwriters were unable to hold the stock above the $38 issue price, everything went to pieces.

In the following weeks Facebook shares plummeted 20 percent, sparking a massive fallout among investors large and small, and entangling Facebook, Nasdaq, and the 33 banks that led the deal into what has become one of the highest profile legal and financial battles in tech history.

Wednesday marked 40 days since Zuckerberg rang that opening bell — an important date both psychologically and legally (it was the first time Facebook’s bankers could publish research publicly) for everyone involved .

So how did we get to this point? And where do we go from here? Watch the video below for CNBC’s Kayla Tausche, Kate Kelly, and Julia Boorstin's insights on the roller-coast ride that was Facebook’s road to going public.

-By CNBC's Kayla Tausche, Kate Kelly, Julia Boorstin and Jesse Bergman