After placing at 38 dollars, Facebook’s shares briefly peaked at 45 dollars before sinking back to 38.25 dollars on their first day of trading.
They have fallen every day since then, and today plummeted nearly ten percent to a low of 28.84 dollars at the close in New York, The Telegraph reports.
According to the report, most of the brokers are expected to cut their losses now that Facebook shares have passed the important psychological thresholds of 30 dollars a share and a 20 percent drop in value.
“When something is this broken this quickly, they sell and move on,” the paper quoted Sam Hamadeh, managing director of US research firm, PrivCo, as saying.
“Historically, initial public offerings that trade down this quickly don’t ever recover. Brokers have lost quite a bit of money and many will have their own rules about dropping out when it passes that [$30] barrier,” Hamadeh added.
Meanwhile, Facebook and its Wall Street advisors are already being sued by investors who lost out in the 16 billion dollars IPO amid claims that they were misled about the social network’s business prospects.