Facebook a HFT's dream in the final 15 minutes of trading
http://imgur.com/c61tU
Before this, it was clear that buy demand was eroding in the final hour of trading in Facebook and sell demand was picking up.
But, JP Morgan and Morgan Stanley have a 2.4b over-allotment option with this IPO which gives the them the ability to continue to sell shares at the offering price. That can counter effect sell orders which drive down the price of the stock - resulting in price stabilization. You can see in the chart that those sell orders were definitely buffered - right at the $38 level - for a good 5 minutes
And, the bid/ask between those orders maintained a 38.00/38.02 during that timespan - almost a full 5 minutes. With a pool of 2.4b to "steal?" from - the HFTs must have absolutely cleaned up during that timeframe.
Why? The underwriters had no choice but to save face and prevent the IPO from dropping below $38. And they had a 2.4b option to draw on. A practically unlimited buyer vs. a big computer that is strategically selling? Wow!
Someone out there in the HFT world is having a nice martini this evening, while everyone else is on this deal is face palming.