By Andrew Tangel, Los Angeles Times –
LOS ANGELES — Facebook Inc. shares skidded on their second day of trading on Wall Street, falling below the initial public offering price of $38.
The stock plunged more than 13 percent at several points during the day, and closed at $34.03, off 10.99 percent from Friday’s close.
A number of analysts on Wall Street have criticized the stock’s performance, and blamed banks who advised Facebook for pricing the shares too high. There were also complaints that Facebook flooded the market by floating too many shares, and that insiders were cashing out.
However, the broader market moved higher after stocks were punished last week. According to preliminary calculations, the Dow Jones industrial average rose 135.10, or 1.09 percent, to 12,504.48. Meanwhile, the Nasdaq rose 68.42, or 2.5 percent, to 2,847.21; and the Standard & Poor’s 500 index rose 20.07, or 1.5 percent, to 1,315.31.
The social networking juggernaut made its stock market premiere on Friday. Shares initially jumped to about $42 a share on the day of the IPO but wound up settling around their initial $38 price, disappointing investors who were hoping for a first-day pop.
Facebook’s premiere was also marred by glitches at the Nasdaq stock exchange, frustrating investors and traders. Over the weekend, Nasdaq Chief Executive Robert Greifeld said the exchange was “humbly embarrassed” by the trading problems and that the exchange would work to correct problems in the future.
Trading of Facebook’s shares were originally delayed. And when it opened, brokers were unable to determine if their orders went through.
