Facebook shares sink as investors 'un-friend' stock
Published Wednesday, May 23, 2012 10:13AM EDT
NEW YORK - Shares of Facebook took another tumble Tuesday, continuing a downward spiral that began at the start of the week.
The blame game has already begun, with some pointing fingers at Nasdaq, where technical issues created confusion during the first day of trading, and others blaming the lead underwriter of the offering, Morgan Stanley.
After being priced at $38, the shares opened at $42.05 on Friday and fluctuated between $45 and $38 throughout the day, before closing up just 23 cents.
On Monday, the Menlo Park, California, company's shares began to tumble and closed down 11 per cent. The losses continued in Tuesday's session, with the shares falling 7 per cent to $31.65 before recovering somewhat at $32.25 in midmorning trading.
However, the initial public offering from Facebook Inc. occurred the same week that the markets posted their worse performance so far in 2012, with the Standard & Poor's 500 index falling 4 per cent.
And it may also be a classic case of investor fleeing risk, as financial turmoil continues in Europe and Asia.
The stock was supported during the first day of trading as underwriters bought up shares to prevent them from falling below $38.
The Nasdaq OMX Group Inc. will be facing shareholders Tuesday during its annual meeting and a significant portion of that time will certainly be devoted to addressing the Facebook issue.