NEW YORK (Dow Jones)--Facebook Inc. (FB) shares fell below its initial public offering price of $38 Monday, on just its second day of trading, a black eye for all those involved with the social networking company going public.
Facebook shares recently traded at $37.08, down 3%.
The premarket decline in Facebook shares sets the stage for the stock to close below the $38 level that shares were priced late Thursday. It is usually considered disappointing for a new stock to fall below its offer price so quickly, especially in the case of the most heavily traded IPO of all time.
While investor enthusiasm was high for Facebook shares, leading bankers on the deal to increase the stock price and number of shares ahead of the offering, many observers questioned the more than $100 billion valuation being placed on the social network, where revenue and earnings growth were already beginning to slow.
In comparison, Amazon.com Inc. (AMZN) has a market cap of $96.3 billion.
On Friday, Facebook's shares repeatedly tested the $38 level, but lead underwriter Morgan Stanley (MS) reportedly moved to prop up Facebook's stock Friday.
Technical glitches also marred Facebook's IPO on Nasdaq as the exchange struggled to deal with a flood of orders. Brokers and investors were unable to cancel or alter trades that had been placed early Friday morning, prompting Nasdaq to delay Facebook's open for 30 minutes.
Shares of Nasdaq OMX Group Inc. (NDAQ) slid 2.7% to $21.40.
Facebook's weak debut dragged down other newly issued online stocks on Friday, such as Zynga Inc. (ZNGA), LinkedIn Corp. (LNKD), Groupon Inc. (GRPN) and Pandora Media Inc. (P).
In premarket trading Monday, Zynga fell 4.2% to $6.86, LinkedIn declined 2.5% to $96.50 and Groupon slipped 1.1% to $11.45. Pandora, however, bucked the trend and rose 1.3% to $9.90.
Also, GSV Capital Corp. (GSVC), a Woodside, Calif.-based fund that invests in venture-backed private companies, posted big declines. GSV has invested in Facebook, Groupon and Zynga, as well as the social-networking company Twitter Inc. GSV dropped 2.7% to $12.80 in light premarket trading.
