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Special Coverage of Facebook's IPO; President Obama Meets with World Leaders; Celebrity Chef Calls for Food Revolution; Facebook's Failure To Launch
Aired May 18, 2012 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ASHLEIGH BANFIELD, CNN ANCHOR: There is an apartment in New York City, $90 million for a penthouse. Somebody actually paid that much money for 11,000 square feet. Who, you may wonder? Keep wondering because the broker is not saying and neither is the buyer. As for the penthouse, we can only show you the mock-up of the outside of this building because construction isn't set to be completed until next year. This is sight unseen, you all.
It does have a catchy address though, 157 as in West 57th Street. Not the priciest. When this is the sign of the times, are there two Americas? What the heck do you get for $90 million?
Who can afford such a thing? So the person to ask is the top New York real estate lawyer Adam who is joining us live from Las Vegas of all places. This sounds like a gamble to me if you're investing that much money in real estate at this time. Adam, set this down for me. Is this bizarre, to see a $90 million condo in New York, or is that just New York?
ADAM LEITMAN BAILEY, REAL ESTATE ATTORNEY: Well, for me and you and those sitting at home, this is extremely bizarre. But for New York City, it actually makes sense. It's not surprising.
Here's why. We have two different worlds, two different worlds in real estate, one for people that have to get a mortgage and the lending restrictions are very tough, and the other where there is a lot of money to be invested and there are very little places to invest that are safe.
What's the best investment in the entire world, the most solid over the last 100 years? Real estate. Where is the best place to put your money where you don't have to worry about ups and downs of the stock market? Real estate. Where do you have to not worry about Europe and European woes? American real estate.
What is the number one city in real estate in the United States of America? New York. New York is the highest, best place to buy real estate -- $90 million is not shocking.
BANFIELD: You're amazing. You should work for the New York real estate bureau because you got me sold, but still $90 million, I will be hard-pressed to find out if they are going to end up getting all that money out of it. But we will watch.
Adam Leitman Bailey, great to see you. Thanks for joining us.
BAILEY: Thank you for having me.
BANFIELD: It is the top of the hour. And I'm Ashleigh Banfield.
The countdown is on officially to the closing of the bell and Facebook, closing of Facebook. We are all waiting anxiously to find out where that is going to end up.
President Obama and world leaders are also meeting at Camp David at this hour. And one of America's cities is bracing for some big- time trouble as well.
It is time to play "Reporter Roulette."
So, let's begin with this.
Ali Velshi is in New York on the first day of Facebook's big trading.
OK, so it kind of seemed like it started with a whimper. Is it going to end with a whimper?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Looks like it. The stock is trading about $39 right now. It opened at $38. As you know, that's the IPO. That was not the first trade; the first trade was $42.05.
And actually a lot of people thought that wasn't really as big as they expected. And it did nothing but go down from there and it actually hit almost the price that it opened at, $38.01. I suspect at that point the underwriters, Morgan Stanley, because this doesn't look good on them when a stock ends up lower than the IPO price, so I suspect they and others got involved in some buying.
But look at it now, $39.02, barely a cent higher than where it opened up. A couple of problems here. One is what's the problem, why aren't more people buying Facebook? What's the concern? The second though is there do seem to be some trading problems across the board at the Nasdaq. Right now in fact -- I just checked -- the volume of shares traded on this stock is over 450 million, Ashleigh.
Typically, Apple will trade 25 million a day, Microsoft under 50. So there seems to have been a problem getting all of these trades through. That may have pulled back some of the enthusiasm about the stocks. Nobody has lost money on it. But we were certainly expecting people saying that the stock would be $50, $60, some saying maybe even $90 -- $39 is not really where I expected to be talking to you about the stock at 3:00 in the afternoon with less than an hour to go in trade. It means some people are not going to be buy that fancy apartment you were just talking about at 1:57.
(CROSSTALK)
BANFIELD: Yes, right. I think Mark Zuckerberg and his executive board is going to be just fine for anything that they want to buy. VELSHI: He's OK.
BANFIELD: Just real quickly, before I let you go, so they are still on track to be the third largest IPO in American history, right?
VELSHI: Oh, yes, yes. It's still huge.
BANFIELD: OK.
VELSHI: This company is still worth more than $100 billion.
BANFIELD: More than you and I make combined.
VELSHI: That's right.
BANFIELD: Ali Velshi, at 3:40, you're going to be a busy man, right, going to do the special coverage, take us to the closing bell?
(CROSSTALK)
VELSHI: That's right. We will be here in 40 minutes. We will take...
(CROSSTALK)
BANFIELD: I love you, man, and looking forward to seeing you in New York next week, Ali Velshi.
VELSHI: See you, Ashleigh. Good.
BANFIELD: Next on "Reporter Roulette," Brianna Keilar is near Camp David for the beginning of the G8 summit there.
Brianna, a little joke between President Obama and the president of France. Have a listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Cheese burgers go very well with french fries.
(LAUGHTER)
(END VIDEO CLIP)
BANFIELD: So, we are back to liking French fries, are we, Brianna?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, certainly, I would say we are, because President Obama is looking toward the new president of France for some good influence, I guess you could say, or some influence on the Eurozone crisis which is at this point potentially in danger of kind of spilling over to a global economic crisis having influence on the U.S.
So, they met for about 20 minutes today in the Oval Office ahead of this G8 summit here at Camp David, Ashleigh. And they did talk about the Eurozone crisis, some common ground the White House is hoping to find with Hollande, who as he campaigned to be president, talked about not just cutting government programs and spending cuts, but was talking about trying to figure out a way to get the economy growing.
So, that is something the White House likes the sound of to stop the economies in Europe from contracting. But there is also another big issue that maybe they don't see quite eye to eye on. That is Afghanistan. They did talk about this. Hollande campaigned on bringing home French combat troops by the end of this year. You will remember U.S. troops aren't scheduled to be out of Afghanistan until the end of 2014.
So, we heard a little bit perhaps of Hollande maybe fudging a bit on that commitment or maybe could you read into it that way when he said that he has made this promise, but France will find a way to support Afghanistan in a different role beyond the end of this year -- Ashleigh.
BANFIELD: Brianna Keilar, looks like a lovely day at Camp David. You got the key assignment today. Thank you, my friend.
OK. Next on "Reporter Roulette," let's take you to Chicago, shall we? That's where Ted Rowlands is standing by.
Protesters are already gathering before the start of the NATO summit there set there for Sunday. So, I guess the key question, Ted -- and I think I can get an eye of it behind you -- is what is the city doing to make sure that they don't have repeats of ugly situations at these kinds of summits in the past?
TED ROWLANDS, CNN CORRESPONDENT: Well, Yes, a lot of this. A lot of police officers out in force and will be throughout the weekend.
There is a demonstration just finishing up in Daley Plaza here across from City Hall in Chicago. There was a nurses' rally. A few thousand people were out here. And as it was ending, some folks did go out into the street, blocked traffic for a while. But as you can see, the police presence is very large.
Chicago police is getting a lot of help from the FBI and the Secret Service as well, sort of breaking it up. The Secret Service responsible for the safety of world leaders when they arrive here on Saturday. Chicago police mainly responsible to keep demonstrators in line.
BANFIELD: So, Ted, real quickly, how are they going to protect the world leaders? I think I saw something about very high fencing.
ROWLANDS: Yes. They have created a security perimeter. They are calling it a red zone of sorts. Blocks of streets have been blocked off. The streets have been blocked off. And there are eight- foot metal barriers that have been put around McCormick Place. That's the convention center where the world leaders are going to be. And there will be a ton of security manpower manning the area.
Protesters, they are frustrated, but they're not going to get anywhere close to any of these world leaders.
BANFIELD: All right, Ted Rowlands live for us from Chicago doing the job for us, thank you, sir.
And that makes up our "Reporter Roulette" today.
All right, keeping you abreast of this story, a young woman from Georgia and her struggle with flesh-eating bacteria has really taken a terrible turn for the worse. And her father's anguish when he has to share the doctor's orders with her, I'm going to share that with you as well.
Also, just into CNN, word from the jury in the John Edwards trial as they make a specific request. We will let you know what they're asking, if they got what they wanted.
(COMMERCIAL BREAK)
BANFIELD: This just into CNN: Jurors are now deciding John Edwards, if he used campaign money to try to hide his mistress and their love child.
They began their deliberations in the former senator's trial about four hours-plus ago. But a judge denied their request to review transcripts of the trial, saying that they had to rely on their memory of the entire month of trial.
And that began April 23. So, think back if you can remember what you had for lunch that day. Edwards is facing up to 30 years in prison if convicted. We are also waiting to find out if they get to cut it a little early this Friday and resume deliberations at 9:30 on Monday morning as well. That was a big request they just made of this judge as well. Still haven't heard whether she has made up her mind to will give him -- or give them that break on this Friday.
This has been a story we have been following. And we have a heart-wrenching setback to tell you about for a young woman who has been fighting off flesh-eating bacteria. Her name is Aimee Copeland. And her father revealed today that the 24-year-old graduate student is going to lose both of her hands and also her remaining foot.
Our senior medical correspondent, Elizabeth Cohen, joining me now.
And we should remind people that up until now Aimee Copeland has fought this off. She has lost her leg, part of her abdomen, trying to remember what else. This has been terrible.
(CROSSTALK)
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: That's right. And she's had several surgeries to go clean this bacteria out. And for a while they were very concerned that she was going to lose her life.
BANFIELD: It seemed like things were going better.
COHEN: They were going better. So, it seems like they have the bacteria under control, but the bacteria did great damage to her hands and to her leg and to that foot.
And the tissue died. And you can't sit around with dead tissue. You need to remove it because it could kill her. This sounds like such horrible news. But I will tell you that when we talked to her dad on the phone, he is actually upbeat because she is doing so much better than she was before. She can talk. She is aware of what's going on around her.
BANFIELD: He had to tell her what's going on, hasn't he?
COHEN: What he had to do in this case is he brought her hands up to her face so she could see that they were purple and explained...
BANFIELD: They were?
COHEN: Right, they were purple because they have lost oxygen -- and explained what they were going to have to do. And she -- and he said it was hard to understand her with the breathing tube in her mouth, but she said, let's do it, because she understands at this point that it's a choice between your hands or your life. And that choice is very clear.
BANFIELD: He is a remarkable man, by the way.
COHEN: He is amazing.
BANFIELD: Every time he takes to the airwaves, I wonder how he's managing. And it sounds like the apple doesn't fall far from the tree.
COHEN: Exactly. She is strong because he is strong.
He is an incredible father. And wrote something on his Facebook page that I -- it is a long passage. But I'm going to read you the whole thing because it is so touching.
COHEN: Yes.
(CROSSTALK)
COHEN: It worth hearing it word for word.
He says -- after they heard the news about how they were going to have to take off her hands, he said: "A tear rolled down my face as I walked out of her room. I wasn't crying because Aimee was going to lose her hands and foot. I was crying because, in all my 53 years of existence, I have never seen such a strong display of courage. Aimee shed no tears. She never batted an eyelash. I was crying because I am a proud father of an incredibly courageous young lady."
BANFIELD: Oh. This is just unbelievable. Do we know when this is happening?
(CROSSTALK)
COHEN: It either -- the amputations were either done yesterday or today. We're not sure. But it's probably in that time frame.
And this likely won't be her last surgery. She is a very sick young lady. Some good news that happened today or recently is that she got her breathing tube out. And a breathing tube goes in your mouth. It makes it hard to talk. She got a tracheotomy. So she will be able to talk more easily. And that is huge so that she can communicate with her family.
BANFIELD: Keep an eye on this.
COHEN: Yes.
BANFIELD: Everyone seems to be just so incredibly gripped by this story. So let us know how it turns out.
COHEN: We will.
BANFIELD: Yes. And the best to Aimee's family as well. It's a terrible story.
Want to let you know this, that the obesity epidemic out of control in this country. There is somebody who has a message for us. His name is Jamie Oliver. You probably heard about him. He is going to join me live to talk about this and how we fight this off.
Also, you are going to want to take a look up into the sky this weekend, but very carefully, because there is a rare event coming your way. But you need protection. More in a moment.
(COMMERCIAL BREAK)
BANFIELD: So, there is a very rare event for part of this country. Look at this backdrop. I'm feeling so magical. This is going to happen on Sunday. It is a solar eclipse.
And if you're a geek, this is geek time. If you live in some areas of the West, it is going to be a spectacular show.
Our meteorologist Chad Myers, who is smart with all things solar and meteorological, is here to explain.
I thought that this looked like a total eclipse. This is not a total eclipse?
CHAD MYERS, CNN METEOROLOGIST: Very good question. It's not a total eclipse because the moon is too far away to block the entire sun. Here, now watch, watch, watch this.
BANFIELD: OK.
MYERS: You can see part of my face, right? BANFIELD: I can.
MYERS: Now, if you put that very, very close, can you see me at all? No.
BANFIELD: You know I can't see much anyway. I'm Mr. Magoo. But I see what but mean.
(CROSSTALK)
MYERS: See? Because if the moon would be much closer to us like it can be at times, then it will block the entire sun. This time it's far enough away there is going to be a ring al the way around the moon. So that's why you should not look at this at all.
BANFIELD: That was my next question, because when I was a little girl, I remember the total eclipse of the sun. And we were all issued these protective eye gear at school. We were allowed to go out and watch it. Look at these images. They're so spectacular. Can you watch with regular sunglasses?
MYERS: No. You really shouldn't.
BANFIELD: What do you have to have?
MYERS: You should have welding goggles or something like that. The best way -- let me have this pen -- the best way to look at this, poke a hole in a piece of paper and take that paper and shine it on another one. You will see be able to the eclipse on the shadow of the next piece of paper.
BANFIELD: You're kidding me.
MYERS: That's the safety way. Or take a picture and you can look at the back of the LCD screen of your camera. The camera won't get ruined.
(CROSSTALK)
BANFIELD: But apart from that, it is going to look something like these images?
MYERS: It is going to be so amazing.
BANFIELD: You're going to be out there tailgating, aren't you?
MYERS: No, it's only to the west, not in the east at all.
BANFIELD: I assumed you would have a road trip planned. Chad Myers, I adore you. Thank you so much.
(CROSSTALK)
MYERS: Thank you.
BANFIELD: All right, throughout your life, your credit score can go up and down just like the stock market, even if you don't know it.
But if you do know it, what about that bad credit rating? How can you fix it?
Our Poppy Harlow has today's "Help Desk."
(BEGIN VIDEOTAPE)
POPPY HARLOW, CNNMONEY. COM: Hey there.
Well, here on "The Help Desk" today, we're talking about how to rebuild your credit. It's a very important issue that effects a lot of Americans. With me to help answer that question, Ryan Mack, the president of Optimum Capital Management, and Stacy Francis, she's a financial adviser and president of Francis Financial.
Here's the e-mail that we got. It came from Angela in New Jersey. She wrote in, "what's the best way to rebuild my credit after filing for bankruptcy?" So, Ryan, this takes a long time, about seven years, right?
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Yes. Well, it does. But you can start right away. And even though that bankruptcy can still be on your report, that doesn't mean that you can't still have a 750 FICO score if you rebuild back up to it.
So doing things like getting a secured card, making sure you go to maybe a local credit union that maybe have a loan builder program. aSmarterChoice.org can give you options for different credit unions. Paying your bills on time. Going to automatic bill payment to make sure you pay your bill on time. Paying down your debts as fast as possible. Going to annualcreditreport.com and really analyzing all of your credit reports and taking out all the errors and that everything you find and dispute on those. All those things are being very diligent.
HARLOW: I do wonder that, how difficult it is to clean up your credit report, Stacy, and also I think it's always worth asking, isn't it, just reaching out to people that you owe money to or debt that there is and asking, what can I do to get this off my report?
STACY FRANCIS, FINANCIAL ADVISER: Definitely. And the thing is, is it took you a while to hurt your credit score and get into debt.
HARLOW: Right.
FRANCIS: Guess what, it's going to take you a while to come out of it.
HARLOW: Yes.
FRANCIS: And so what you want to do is definitely make those on- time payments, make sure that you are using credit. Definitely open up another credit card or secured card and start to rebuild that credit. But it's not something -- they didn't build Rome in a day. Guess what, your credit is not going to be fixed in a day either. HARLOW: Absolutely. Thanks, guys. Appreciate it. Folks, if you've got a question, just send us an e-mail anytime to CNNHelpDesk@CNN.com -- back to you.
(END VIDEOTAPE)
BANFIELD: Poppy Harlow, thank you for that. Much appreciated.
Up next, one of the world's most famous chefs is going to join me live. You know him. He is Jamie Oliver. I'm going to ask him about why we are so darn lazy, why we like places like the Heart Attack Grill, and why he is recruiting major celebrities for one very simple message. There he is. We will talk live in just a moment.
Hey, Jamie. It good to see you. Talk to you live in a couple.
(COMMERCIAL BREAK)
BANFIELD: It is that time of day when you're thinking you might get yourself a little snack, something salty, sugary. I don't know, something from a vending machine.
If that is your plan, hold the phone, because you are going to have to explain that choice to my next guest, Jamie Oliver. He is the celebrity chef and the food crusader who is warning the developed world that we are getting fat, and not just a little fat, dangerously fat.
He is here today to help promote his cause celebre, which is Food Revolution Day. It's tomorrow.
Jamie, great to see you. And I'm so glad you're here, because there was this report that was just released in Oregon, keeping in mind Oregon. Take a look at the number. According to the Oregon Health Authority, 60 percent of adults in that state are either overweight or obese. And this is Oregon, which is known for the outdoor lifestyle and the sports.
If Oregon is that state, what state are we in here?
JAMIE OLIVER, CELEBRITY CHEF: Well, I think whether it's the United States of America or Britain, we are both doing really well in getting really unwell.
And the reality is, is life has changed over the last 30, 40 years. And the biggest killer in both our countries is not car crashes, it's not war, it's not homicide, it's not even smoking cancer even anymore. It's diet-related disease. So, from my point of view, I guess the last seven, eight years I have spent trying to make awareness.
I have got so many sort of strands of what I do, whether it's sort of telling people about how amazing food is, and how simple it is and how cheap it can be and having fun with it to sort of campaigning against governments and sort of trying to do documentaries to try and get big companies to change the things that they are doing. So, I do a whole number of different things. But, tomorrow, Food Revolution Day is really about trying to get everyone to just have fun with food.
(CROSSTALK)
BANFIELD: I remember one of the first times I saw you, you were showing a tomato to some kids in school asking them what it was. And a lot of them had no idea. And it was really earth-shattering to see that.
(CROSSTALK)
BANFIELD: One of the things that you put out in your press release which I couldn't believe when I saw it -- I had to read it twice, so I want to put it up on the screen -- and I think people will probably take note.
"More people die from diet-related diseases every year than from drugs, alcohol and war combined." And also, "The majority of the world's population is more likely to die from obesity than from hunger."
How are these statistics even possible, especially on the global level?
OLIVER: A lot has happened and a lot has changed in the last 40 years, whether it's the types of farming, whether it's technology and the kinds of processed foods that we can buy into.
At the same time, many people go to work -- 30 years ago in America, only 12 percent of women worked. Now it's about 65 percent. So, our lives, our world and our priorities have changed a lot. And it's always a shock. We have a scheme in England where I build kitchens and gardens in schools.
And we went to the poorest school in this part of London the other day. And in the play -- in the outside area when I walked outside, all these 8-year-old and 9-year-old kids, they all have mobile phones, and all the big brands, 200-, 300-pound phones.
BANFIELD: Wow.
OLIVER: And this is -- so you can see how much our lives are changing and our priorities.
And I guess what I'm trying to make Food Revolution Day celebrate is -- it's not my day. I don't own it, but also I have realized working in the States now for about 14 years, all the answers are here in the States. There's amazing people all around the country doing beautiful things,parents, groups, organizations, companies, some businesses.
And what we're trying to do on Food Revolution Day is give them all a pat on the back, join them all up and also try and give them all more confidence to carry on doing the great work they are doing. BANFIELD: It's a huge effort and it's noble, especially in a country where we have a restaurant called the Heart Attack Grill.
And just for those who may not known about the Heart Attack Grill, let's read the menu, shall we? It reads, over 350 pounds, you eat free. This is a restaurant that is boasting a quadruple bypass burger that has 8,000 calories if you finish it. People have actually passed out and had to be -- 911 and paramedics have had to be called.
Have a listen to this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Other diets don't deliver results, but I have made incredible progress on the Heart Attack Grill diet. A couple of months ago, I was wearing these.
(END VIDEO CLIP)
BANFIELD: Ay yi yi. So this -- I get it. And we are laughing and it's funny, but the reality is this is a marketing ploy that people are buying into, because there is no shortage of business at the Heart Attack Grill.
OLIVER: No, you're absolutely right. I think -- look, I have worked in many of America's communities. I have spent times in elementary schools, high schools, poor areas, parts of America where there is no clean water coming into their main's water, where getting fresh food can be a 50-minute journey away just to get fresh food, instead of the processed food.
The reality is, is whether you're talking about Britain or America, is our countries are in crisis. And the biggest killer is being ignored because it's not very dramatic. There's no bullets. There's no car chases.
And I guess what Food Revolution Day is all about is trying to get the people that do care -- you know, because America is a very diverse country of amazing producers, amazing suppliers, amazing culinary history. It's a melting pot for the whole world. So there's so much to celebrate for sure.
BANFIELD: Yes. If you say there's no bullets and there's no sirens and actually people are laughing more than they are crying about the crisis we're in, I want you to look at a picture on your screen as we go out to break. If you can stand by for one second. This is Honda's newest answer to how we are supposed to be getting around the office. I kid you not. Because it's just too tough to walk to the elevator. Jamie, you're going to have to get me off the ledge when we come back after the break.
(COMMERCIAL BREAK)
BANFIELD: We are back live with celebrity chef and food crusader Jamie Oliver. He's organizing tomorrow's global event Food Revolution Day. Jamie, before the break, I threw up on the screen that new device from Honda. It's called the UNI-CUB. Take a look at this. It's a chair. It's a scooter. Basically it's a device that basically allows you never to get off your butt and walk any where again. Is there any place for something like this in our existence, Jamie?
OLIVER: I don't think so. No, I think, you know, the idea of trying to get a bit more physical, even if it's walking to work or up the stairs, you know, they're the kind of things that are really going to help people, not making life easier.
BANFIELD: Yes. So, listen, there was a group of doctors who asked -- oh, bless you. There was a group of doctors that asked our president to stop eating junk food in public. And you probably have heard about Michelle Obama, the first lady's efforts to really get this country thinking about fresh foods. She planted a garden at the White House. She's into exercise. Other people criticize and say that's nanny nation. Is there anything wrong with making these efforts so public?
OLIVER: No, I don't think so at all. I mean I think if the Obama administration really care about, you know, their country, of course they have to acknowledge the biggest killer. And, you know, I think Mrs. Obama has been wanting to do a lot of stuff. But I think, the way I look at it, is over the last eight years, I've started to realize that politics is very, very -- it doesn't have as much control as we all think it does, do you know what I mean? I think the real key lays with the public. And every time the public decides to buy something here or there, they are essentially voting the best vote of their life. You know, so, for me, I think there's way more power with the public, inspiring the public, and, you know, I'm seeing change here in the states, but back home in the U.K., I've seen some dramatic change just by informing the public about how certain things are made and how certain things aren't made. And it's not so much, don't have a burger, because we all love a burger, but I think you want to know what's in it and you want to have clear signposting about, you know, is it good for you or not? And then if you're indulging, indulge. But you don't really want to be indulging when you don't think that you are.
BANFIELD: Right. And also you might not want to get the quadruple bypass burger.
Jamie Oliver, thank you for being here. It's great to see you. And good luck with Food Revolution Day tomorrow.
OLIVER: Thank you very much.
BANFIELD: Nice to see you.
And we are back right after this.
(COMMERCIAL BREAK)
BANFIELD: Thirty-eight minutes past the hour which means we are just minutes away from the closing bell and Facebook's biggest moment of the day. That is the results of IPO day. I'm Ashleigh Banfield. Our special coverage from New York with Ali Velshi begins right after this.
(COMMERCIAL BREAK)
ALI VELSHI, CNN ANCHOR: Welcome to our special coverage of Facebook. I'm Ali Velshi.
CHRISTINE ROMANS, CNN ANCHOR: And I'm Christine Romans.
Facebook. It's the most anticipated tech stock in history. A company that represents a new paradigm shift on the web. But for all the hype and for all of that anticipation, Facebook's stock debut today came out with a bang before retreating with a whimper. I've been calling it a fizzle.
VELSHI: And that's where it is now. In the next 20 minutes of trading, we're going to cover the story of Facebook's first trading day as only CNN can. Alison Kosik at the Nasdaq, where Facebook's stock has just momentarily dipped below the IPO price of $38 and it is now just a few cents higher than it right now. All the other social media stocks are down with it.
Felicia Taylor is live on the floor of the New York Stock Exchange. She's been talking to traders all day. Dan Simon is at Facebook headquarters in Menlo Park, California, where thousands turned out to see Mark Zuckerberg remotely ring Nasdaq's opening bell and turn a page in history. And from Boston, Ned Riley, who was nervous from the start about all the attention Facebook was getting and he does this for a living. We'll get to all of you in a second.
Christine, this is largely -- it's not impossible that a stock doesn't go up on the first day of the IPO, but on one of the most talked-about stocks and IPOs of all time.
ROMANS: It certainly is a -- it certainly is a surprise. And there was a lot of concern that small investors were going to jump in here and then get in the way of a runaway freight train. And this has not been a runaway freight train.
VELSHI: Right.
ROMANS: You could almost argue that maybe it's been priced perfectly, quite frankly, because the stock came out, debuted at $38 and right now it's unchanged $38.01. We'll see in the next 20 minutes exactly what happens. But there's 400 million shares of stock trading today that wasn't available the day before. And this is the market process that.
VELSHI: It's accelerating right now. So keep in mind, Microsoft, on a given day, might trade 50 million shares. Apple, a very heavily traded stock, might trade 25 million.
ROMANS: Right.
VELSHI: We're probably at about 500 million shares trading hands. And that caused a major, major problem at the start of trade and all through the trading day. Alison Kosik is at the Nasdaq MarketSite. That is where this stock is listed.
Nothing but trouble for much of the day when it came to trading, Alison.
ALISON KOSIK, CNN CORRESPONDENT: Oh, you said it, a messy debut for Facebook. As you can see, shares are flat. We are seemingly ending the day where we began, that "unchanged" word sitting there on the board behind me. You know, but it was a mix of -- it was a mix of technical difficulties here at the Nasdaq and lackluster demand. And that bled over to other social networking stocks, including Zynga. Zynga shares actually were halted during trading today because so many people sold those shares so fast. Zynga shares down 13 percent right now. Others shares down as well. Yelp down 10 percent. Pandora down 5 percent. Groupon down 8 percent. And Linkedin shares down 6 percent.
This is -- usually you see this happening when a strong company in one of these sort of sectors doesn't do as good as planned. You see these other shares that are sort of in this same realm fall like that. But, you know what, one analyst says, you know what, the overall long-term trend for these social networking sites, for some of them at least, it is positive. Analysts say, you know what, people are using social media. Advertisers are spending money even though GM pulled out of its advertising on Facebook. So there are advertisements. People are spending money. And they are using those social networking sites. And not every social networking site does as good as the next. And one day of trading, by the way, Ali, before I throw it back to you -- one day of trading for Facebook doesn't mean this is how it's going to be for the long term.
VELSHI: That's a very important point.
So we've been talking, Christine, about whether this is bad for Facebook. This might be the best deal a retail investor ever got. Because we always say that on a big IPO, the retail investor can't get in on the IPO price. Look at that price. 38 bucks is exactly the IPO price.
ROMANS: And it is the first day of trading. This is the beginning of the new chapter for Facebook. Let's go over to Felicia Taylor at the New York Stock Exchange. Felicia, traders there as well watching what's happening on the competing exchange.
FELICIA TAYLOR, CNN CORRESPONDENT: You have no idea how much attention there is on this stock. I've been talking to traders all day long. And listen, I want to tell you something that's really interesting about what's actually keeping the price of this stock around $38 where it was -- the IPO price. That is a lot day traders getting in at the last minute and trading it up and down. Just a fraction. A few pennies here and there. That is what's hampering the stock right now. It likely will - and of course, the underwriter comes in at that $38 price range and keeps that price.
The expectation, or at leas the speculation, right now, is that it could possibly trade even lower than the IPO price next week. Next week is going to be a focal point for Facebook stock. Right now, though, it's the day traders that are keeping it in a very tight range. Probably in the next 20 minutes or so, you're likely to see this stock close at exactly where it opened. Although there is the one speculation out there that this is exactly what the underwriters wanted, you know, a little bit of a pop at the open, up about five or 10 percent, that too is out there. But frankly, right now, this stock is being traded and traded heavily.
ROMANS: All right. Thank you, Felicia.
VELSHI: All right. Dan Simon is at Facebook headquarters. This was an amazing -- regardless of what's going on with the stock, which is very unusual, it was an amazing day at Facebook. They rang the opening bell --
ROMANS: Lots of new millionaires -
VELSHI: Lots of new millionaires -
ROMANS: -- big millionaires, no matter what happens today.
VELSHI: Mark Zuckerberg, the whole -- thousands of people came out to kick it off on the first trading day. Dan, does this matter, the stock price thing out there? Does this matter to them? Or are they not following the stock all that closely?
DAN SIMON, CNN CORRESPONDENT: They are watching it. But, you know, I spoke with a Facebook executive a short time ago, and I asked him about the stock price and he didn't really have much of a reaction. Sort of picking up on what Alison said - look, it's the first day. This is a marathon they are running here.
But I can tell you that he told me that the energy level in that courtyard when they rang the bell was tremendous. All night when they had the hackathon, when people kind of get together and come up with some new ideas. There was so much electricity in the room -- said it felt like a rock concert.
That said, right now it's a bit more subdued. These guys pulled an all-nighter. And so a lot of them actually went home. They are taking a break. Some of them actually did go back to work. But earlier today as Mark Zuckerberg rang that bell, obviously, so much enthusiasm in there. And of course, they are watching the stock price closely, but at this point, obviously, not much concern.
VELSHI: All right. Dan, thank you very much on that. Dan makes a good point. They are tired. They worked all night. Here's something interesting. You're seeing the price at, $38, $38.01. That is not necessarily a natural place. It's not that it all of a sudden came to $38 and it's jockeying around there. My suspicion is that the underwriters, Morgan Stanley -- it looks bad very for a company that advises a company that is going for an IPO to price the stock incorrectly. So the fact that it gets to around $38, I wouldn't be surprised if there is what you call intervention in the market. That Morgan Stanley and its friends are buying the stock so that it does not close below $38.
ROMANS: And, as Felicia said, there are a lot of people who thought they never had a shot, and then suddenly now they are day trading in the afternoon, thinking, "Wow, I can get it at $38."
One man who is not surprised about all this is Ned Riley, the CEO and founder of Riley Asset Management investment company. Ned, you didn't buy the stock, and you told people not to touch it. You were not buying into the hype. So Ned, we talked about the failure to launch today. Was the hype unjustified?
NED RILEY, FOUNDER AND CEO, RILEY ASSET MANAGEMENT: Yes.
ROMANS: Just yes. It was unjustified. So many people thought it was going to go up. They thought this was a company that everyone understands, $900 billion, Mark Zuckerberg is a genius, Sheryl Sandberg is the best COO in America. Are you surprised it's only $38 a share right now?
RILEY: I am surprised that it's $38. But there are several reasons for it. And Ali hit it right on the head there, too. The syndicate has got to keep that price at $38 a share for the end of the day, anyway. So they are in there buying stock other people are selling. Because nobody wants to carry a long position over the weekend.
The second thing I'm encouraged about, is that people paid attention to some fundamentals, I hope. That was the fact that the company itself said it could not convert to the mobile concept successfully at the moment. It's hurting their short-term earnings. It could hurt their long-term earnings. You've got to come up with a pretty big platform that is going to figure out how to put advertising on the iPads and rest of the devices out there.
Third thing I had a problem with, too, is -- what they call in the business oversubscribing.
VELSHI: Right.
If you don't think you're going to get your 100 shares, you can order 300 shares. Well, what I heard this morning was, an institutional manager had put in for a million shares -
VELSHI: Got them.
RILEY: -- and got them.
VELSHI: That's exactly right
RILEY: So that's rocked the heck out of him.
VELSHI: So, what happened, Ned - we're trying to piece this together - but what happened between maybe 10:30 when this thing was supposed to open for trading, and about 11:30 when it did, we were hearing, was that traders were trying to cancel orders. Which is very suspicious on a brand-new IPO. But here's the thing, Ned. We had people saying it was going to be $90, $60. You were at the low end. I think you were talking about $50 maybe? So does that mean that you think --
RILEY: Maybe open at $50. VELSHI: You think it's got some space to ride? If you are the retail investor watching us, the average joe, and can you actually buy a stock at the IPO price of a major company, should you?
RILEY: See, $50 I threw out was purely on the hype and the speculation. Remember, between the time we met before and now, they increased the size of the offering by the selling shareholders so you actually provided more supply for that demand out there.
The second is that, after the initial hoopla of the whole thing, people decided that the demand wasn't as great as it looked before, so they're all selling in. And that $38 price that hit this morning, that too was the syndicate coming in there and saying, "Whoa, wait a minute, we can't break that price so we're going to support it until it starts to go back up again."
ROMANS: Ned, don't go anywhere.
We're going to go back to the New York Stock Exchange right now. Felicia Taylor is there. And she's got Ken Polcari with her, someone who understands very well the trading problems. I was saying earlier, it was like an anaconda trying to swallow a goat. 400 million shares into the stock market. There were some problems.
TAYLOR: That's a great analogy, Christine. I wouldn't have come up with it myself but I love it.
OK, the point being is that this was a $420 million offering. I mean, you can't really compare this to anything else. And the valuation of $100 billion, that's the first company ever to go public like that.
KEN POLCARI, MANAGING DIRECTOR, ICAP: That's right. So from that point of view you can't compare it to anything else that's out there so it is difficult. But beware -- this morning the opening wasn't 400 million shares. The opening was 78 million shares. Yes, it's a lot of volume, but it's not enough volume that it should have caused a technological breakdown at Nasdaq. Which is - actually, when that started to happen, what cause some of the nervousness in that whole social media group.
TAYLOR: The fact they weren't able to fill some of these orders, how concerning is that?
PLOCARI: Well, the issue about not filling orders is the technological failure. So that's what caused part of the problem is that the system got overwhelmed and when they went to open it, what happened was, the reports were not going back automatically. So people who had orders in there to buy or to sell did not know whether their order was represented, was it executed, did they get a completion or not. In fact it took Nasdaq almost four hours to get the reports out. In fact, it is interesting but they were going out giving manual reports.
TAYLOR: Which is not what they normally do.
POLCARI: Clearly not. They're the technological exchange. TAYLOR: Not like the New York stock exchange. There was a little humor here.
(LAUGHTER)
VELSHI: Kenny, Kenny.
POLCARI: Ali and Christine are well aware.
TAYLOR: As the day closes, we're seeing a lot of day traders jumping in right now. Are you surprised about this? I mean, I mean this is heavily traded right now.
POLCARI: No, I'm not. But listen, it's not nearly going to have this volume next week once it settles down. And don't forget -- Ned and Ali actually made a very good point. The $38 bid right now is a syndicate bid. This stock is not trading below $38 today.
Monday or Tuesday might be a different issue. I would think probably not Monday, maybe Tuesday they'll let it go on its own. But it's certainly not trading below $38 today.
VELSHI: I'm going to pick up on that point. That's a brilliant point, Kenny and Felicia. Syndicate bid - let me just explain that to our viewers. The group -- the stock is underwritten. When you want to go public, you find a bunch of bankers. In this case, Morgan Stanley was the lead banker. They get other banks. These are the people who advise the company on what the price should be, and they want there to be enough demand. So they -- it is bad for business for Morgan Stanley and the syndicate if this thing sells for less than $38, so they are supporting it, they're getting in and buying it. But as Kenny says, at some point this gets old. They might do it for a few days.
TAYLOR: That's right. Watch what happens next week. See, everybody clapping down here on the floor? They're watching this stock hitting $38 and even dipping below it. They're surprised about this.
POLCARI: Listen. It won't dip below today. No matter what happens with the market I would be very surprised if Morgan Stanley, Goldman Sachs, or First Boston (ph) let this thing trade below $38 no matter what the broader market does. Now, Monday, like Ali said - or like you said, Monday or Tuesday will be a very different story. It's got to jump, it's got to run on its own two feet.
TAYLOR: You can hear the whooping on the floor. They are watching this, every single trade that happens. You can literally do that on some of these monitors because of electronic trading. It is highly traded right now.
VELSHI: All right. Felicia, Kenny, good see you, as always. Ken Polcari is an old friend of ours.
Hey, so, we're watching this thing, $38, $38.01. Did you see it flash $40 a minute ago> ROMANS: I did, I did --
(CROSSTALK)
VELSHI: So this is very volatile trading.
ROMANS: Look, I want to be clear here. We've said from the very beginning that this is --there's excitement around Facebook, something that 900 million people around the world use. You all understand it. We always say, you know, buy or invest in what you understand. But this is the first day of the next chapter for Facebook. Right? Facebook as an investment. We're going to learn a lot more about how this company earns money and what it is going to do next.
What, Ned - bringing you back in - what, Ned, does Facebook have to prove right now to hold on to $38 a share in the stock market?
RILEY: Well, I'm not sure they're going to prove it right away because the platform, new business platform that they have to work on is going to be very difficult. I am shocked that Facebook hasn't already thought about this and developed it. They pointed it out in the second quarter report that the revenue was not coming along with the conversion of people from laptops and desktops over to the mobile devices. So, you know, if you hadn't thought about it before, I'm a little nervous that they're going to suddenly develop the idea and here we can put the advertising next to the -- on that mobile app.
ROMANS: So many people are excited and inspired about stock market investing all of a sudden. People who don't even know how to log on to their 401(k) are asking me, you know, how do I get Facebook shares. Is this a moment to maybe think about how you should be invested?
RILEY: Christine, I thank you for that question. I have had a problem with these social media stocks for a while now. And selling at multiples that are ridiculous and the frenzy around them. Everybody saying look, this is it, this is the new generation. The new technology of the decade that comes. I heard that about 15 years ago. The problem we've got right now is one that they've created such a size of an audience and yet they are living off the ad revenue that's generated from it. These are going to be great companies and they still are great companies, but you know, it's duplicated, it can be replicated. This stuff is not without its competition. And Facebook's got it to.
ROMANS: All right. Thanks Ned. And we're going to keep talking about this for the next hour. Thank you Ned Riley. We're going to take a short break now. When we come back, the closing bell with Wolf Blitzer.
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