Facebook Inc. hovered near the initial public offering price in its trading debut, following a record IPO that made the social network more costly than almost every company in the Standard & Poor’s 500 Index.

The shares rose 23 cents above the IPO price of $38 as of 4 p.m. in New York. Facebook sold 421.2 million shares to raise $16 billion Thursday, giving the company a $104.2 billion market value.

The stock had spiked early in trading, reaching as high as $45.

Underwriters bought Facebook’s stock to keep it from falling below the IPO price, people with knowledge of the matter said. The offering valued the company at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential. The performance disappointed some investors who expected a first-day pop.

“They squeezed the lemon dry here,” said Dan Veru, chief investment officer at Palisade Capital Management, who didn’t participate in the IPO. “They didn’t leave enough on the table. You want to price these things a little lower, so that the shares have better support in the aftermarket.”

The IPO price made Facebook, co-founded in 2004 by a then- teenage Mark Zuckerberg, the largest company to go public in the United States. While Facebook has evolved from a Harvard University dorm-room project into a social network with more than 900 million users, revenue growth is poised to slow for a third straight year and advertising sales haven’t kept pace with user additions.

“This is what happens when you price something around 100 times earnings,” said Barry Ritholtz, chief executive officer at FusionIQ in New York. “If this closes poorly, there is nobody to blame but the company and the underwriters themselves.”

Facebook priced at the top end of its range of $34 to $38 a share, valuing it at about 26 times sales in the 12 months through March 31. As of Thursday, that was more than twice as much as AvalonBay Communities Inc., currently the most costly company by that measure in the S&P 500.

At $16 billion, Facebook’s sale surpassed that of General Motors Co., making it the second-largest in U.S. history, excluding so-called over-allotments, which let underwriters buy more shares at a later date, data compiled by Bloomberg show.

GM raised $15.8 billion in November 2010, before expanding the sale to $18.1 billion when underwriters exercised the over-allotment option. Visa Inc. raised $17.9 billion in its 2008 IPO, the biggest in the U.S., and later expanded the sale to $19.7 billion. Facebook’s underwriters may buy an additional 63.2 million shares at the IPO price, which would enlarge the IPO to as much as $18.4 billion.

Facebook’s offering price gave it a market capitalization almost double the $60 billion United Parcel Service Inc., previously the biggest company to complete an IPO, was valued at when it went public in 1999, according to data compiled by Bloomberg and Dealogic.

Facebook stock is listed on the Nasdaq Stock Market under the symbol FB. The social network, led by 28-year-old CEO Zuckerberg, is the first company to complete a U.S. IPO in a week, after vacuum-pump maker Edwards Group Ltd. raised $100 million on May 10.

The 67 companies that completed U.S. IPOs this year before Facebook gained an average of 7.2 percent in public trading through Thursday, data compiled by Bloomberg show. Before Friday, six of the 10 best-performing newly listed U.S. stocks this year had been Internet or technology companies, led by Guidewire Software Inc., the provider of software to the insurance industry that gained 95 percent.

Facebook’s IPO coincided with intensifying U.S. market turmoil. About $1 trillion had been erased from American equity values this month after speculation Greece will leave the euro region reversed the biggest first-quarter rally since 1998, according to data compiled by Bloomberg.
Facebook’s bankers, led by Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc., may split about $176 million for managing the IPO after accepting a lower-than-average fee for their work. Facebook hired more than 30 underwriters, which also included Bank of America Corp., Barclays Plc, Allen & Co., Citigroup Inc., Credit Suisse Group AG, and Deutsche Bank AG.

They’ll get about 1.1 percent of what Facebook raised, said two people with knowledge of the matter, who declined to be identified because the rate is private.

The IPO price gave Facebook a market value about half the size of Google Inc., which is worth more than $200 billion. The search-engine operator’s value has jumped almost ninefold in the eight years since it went public. To hand its public owners the same returns after pricing at the top of its offering range, Facebook would have to be worth about $920 billion by 2020.