May 21 - Shares of Facebook continued below their initial public offering price of $38 as questions arise after a muddled debut last week. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Wall Street's attitude towards Facebook seems to have quickly turned from like to dislike. Shares of the social media network opened lowered on its second day of trade, sinking as low as $33, or 13 percent, a share by mid-session. Underwriters who helped prop up the stock on the first day of trade were absent this time around. There are also questions as to whether Friday's chaotic debut by the Nasdaq created the environment for the stock to fall further. But Joseph Foudy of the NYU Stern School of Business says he thinks the drop has more to do with investor sentiment about this specific stock. SOUNDBITE: JOSEPH FOUDY, ASSISTANT PROFESSOR OF ECONOMICS AND MANAGEMENT, NYU STERN SCHOOL OF BUSINESS (ENGLISH) SAYING: "The fact that it has gone down in price is purely a reflection of the initial offering price and the fact that it was so rich. The company is valued at something like 75, 100 times earnings and we really have no indication that it's going to be able to earn that kind of revenue that will justify that valuation." Trading continues to be frantic as investors try to figure out what's the right price for Facebook shares. More than 52 million shares traded hands in just 15 minutes, and that's on top of the massive trading volume seen in Friday's debut. Conway Gittens, Reuters