Facebook shares drop below IPO price in pre-market
The world's largest social network's shares are down, despite ending their first day on the market above their initial price.
Facebook's shares are trading lower on their second day on Nasdaq.
In pre-market trading this morning, the company's shares dropped 4.37 percent to $36.56, leaving them below their initial $38 offering price and their first-day close of $38.23.
Facebook's shares rose to a high of $45 on Monday before flirting with falling below their initial price. It was believed that the stock was buoyed by underwriters to ensure it didn't slip below $38.
Aside from Facebook finally going public, the big story on Friday was Nasdaq delaying its opening due to a technical glitch. In a statement, Nasdaq chief executive Robert Greifeld said yesterday that his company was "humbly embarrassed" by its issue, adding that it was "not our finest hour."
More importantly, Greifeld maintained that Facebook's quick drop from $42.05 to $38 on Friday had nothing to do with the glitch.
Regardless, the drop and subsequent softness in demand have sparked some fear among investors and industry observers over whether Facebook was priced too high at its start. However, more long-term thinkers don't think it's time to get paranoid about Facebook's shares or their prospects of long-term success. Two days of trading is nothing, and early losses can be made up quite quickly.
Wedbush analyst Michael Pachter is among the many who believe Facebook will see its shares soar in the coming months. In a note to investors today, Pachter said he expects the social network's stock to rise to $44 in the next 12 months. Sterne Agee analyst Arvind Bhatia said earlier this month that he expects the company's shares to jump to $46 over the next year.
Updated at 6:20 a.m. PT to include more details.
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