On this day in economic and business history …
When the day was done, people began to feel as if Wall Street might have pulled one over on them. The biggest IPO in years — perhaps decades — couldn’t even muster that coveted first-day pop. Glitchy exchange software delayed the start of trading for Facebook Inc (NASDAQ:FB) shares, and when trades resumed, the social network’s underwriters were forced to step in to shore up the share price, an unexpected move for such a highly anticipated stock.
The plunge was steep. Within a week, 17% of Facebook Inc (NASDAQ:FB)’s first-day value was gone. As June began, Facebook Inc (NASDAQ:FB)’s first-day shareholders found themselves sitting on a 30% loss. A year after its IPO, Facebook’s shares remain 30% below the IPO day’s closing price. Some analysts, including the Fool’s senior technology analyst, Eric Bleeker, took it as a sign of Wall Street’s unfettered ability to rig the IPO game against the little guy. Others simply recognized that the price was unsustainably high. Whatever the case, it seems unlikely now that Facebook Inc (NASDAQ:FB) can ever become the next great tech stock, regardless of whether it can become the next great tech company.
Mmm, genetically modified
The Flavr Savr tomato became the first genetically modified food approved for human consumption when it cleared an FDA review on May 18, 1994. Developed by Calgene, the tomatoes were “enhanced” with an antisense gene to slow the rotting process, which was meant to keep the tomato from softening too soon without restricting the tomato’s normal color and flavor from being expressed at the normal time. However, Calgene’s scientists were rather poor farmers, and their starting tomato produced drawbacks that couldn’t be overcome. Weak harvests and costly shipping methods combined to create an unprofitable tomato,