Tuesday, May 22, 2012

Facebook shares sink again

Oh crap! Facebook shares sank further Tuesday amid new accusations that key underwriters had cut their forecasts for the company just days before Friday's initial public offering.

Facebook shares lost another 8.6 percent Tuesday, closing at $31.12, leaving them 18.1 percent below the IPO price.

The shares continued to fall in after-hours trade, falling to as low as $30.72, as analysts and investors concluded that the $16 billion, 421 million shares IPO was just too big for the real demand and that major early institutional investors had not intended to hold on to them.

On Tuesday reports surfaced that Morgan Stanley and two other key underwriters, JP Morgan and Goldman Sachs, had cut the forecasts they provided to their customers days before the issue.

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