Facebook hits new low and briefly dips below $28May 30, 2012: 4:31 PM ET
Facebook shares continued to sink Wednesday. The stock, which has fallen on all but two days since its botched debut on the Nasdaq less than two weeks ago, dropped as much as 3.4% to a fresh low of $27.86. Dipping below $28 is significant because Facebook's original price range for its initial public offering at the beginning of May was $28-$35 a share. Facebook eventually raised the range to $35- $38 a share and priced the IPO at $38.
Facebook's (FB) did bounce off its lows though Wednesday, closing the day at $28.19, down 2.3% from Tuesday.
Though the social media's public offering was the third largest in the United States and highly anticipated, the stock's performance has been underwhelming since it began trading on May 18.
For starters, Nasdaq flubbed the IPO by delaying the start of trading by half an hour and mismanaging the processing of orders. The exchange's glitch is costing Wall Street firms millions of dollars, and leaving individual investors with substantial losses too.
Adding to Nasdaq's woes, Facebook's underwriters, including the lead Morgan Stanley (MS), and Facebook are facing a shareholder lawsuit for allegedly sharing negative information about the IPO with institutional investor. The Financial Industry Regulatory Authority, Congress and the state of Massachusetts are looking into the allegations.