SHARES in the social networking website Facebook have nosedived in early trading in New York today, as investors look to offload their newly-acquired shares in the company.
The company’s first full day of trading on the NASDAQ – following a delayed start to trading on Friday, its first day on the stock market – has seen investors taking heavy losses on their shares.
After closing on Friday at $38.23 – around 0.6 per cent up on their opening price of $38 – shares had fallen by 13.6 per cent within 25 minutes of opening this morning, falling by over $5.
Image: Google Finance
The falling shares follow reports that the IPO’s underwriters Morgan Stanley had been forced to dip into their pool of reserve shares during Friday trading in order to artificially prop up the price of the shares and keep them higher than their $38 opening value.
It had been speculated that the actions meant the reserve pool – which is usually kept aside by a financial services firm in order to cater for higher-than-expected demand, to keep prices lower – had already been exhausted.