FACEBOOK SHARES sank in the first day of trading without the full support of the company’s underwriters, leaving some investors down almost 25 per cent from where they were on Friday and driving others to switch back to more established stocks.
Facebook’s debut was beset by problems, so much so that Nasdaq said yesterday it was changing its IPO procedures.
That may comfort companies considering a listing, but it does little for Facebook, whose lead underwriter, Morgan Stanley, had to step in and defend the $38 offering price on the open market.
Without a fresh round of defence, Facebook shares fell $3.79 to $34.34 in afternoon trading. That represented a decline of 10 per cent from Friday’s close and 24 per cent from Friday’s intra-day high of $45 a share.
The drop in Facebook’s share price wiped some $10 billion off of the company’s market capitalisation. Volume was again massive yesterday, with more than 141 million shares trading hands by late afternoon, making it by far the most active stock on the US market. – Reuters
