Bill Hambrecht Says Facebook Value will Settle, Wants Dutch Auction Model

Speaking on CNBC on Tuesday morning, investment banker and W.R. Hambrecht & Co chairman Bill Hambrecht the market will settle on a price for Facebook

as the value is created by the interaction of its users. Hambrecht said that the market will seek its level. "It will come to a market price that balances supply and demand. The impact of the IPO lasts a few months but not much longer." On the subject of underwriter control, he said "Facebook is attractive for any underwriter, so it bent over backwards [the underwriter only took a 1% fee]. It's a competitive world." Finally, Hambrecht confirmed that he advocates a Dutch auction model. "It's the most effective and accurate price discovery system," he said. "It will match supply and demand. The market is smarter than any underwriter and any company."