Facebook shares slumped to more than 10 per cent below their float price on their second day trading as a public company.
The syndicate of Wall Street banks which, last Friday, had intervened heavily to keep the stock in positive territory was yesterday overwhelmed by sell orders and Facebook stock changed hands at as low as $33.01 in early trading, and closed at $34.03, 11 per cent down. That compares with the $38 at which Facebook and some of its earliest investors sold shares last week. At $33, the company is valued just above $90bn.
Buy and sell orders came in at a frenetic pace, and Facebook was the most heavily traded US stock, with more than 100 million shares changing hands before noon. At one point, the drop in the shares was so steep that circuit breakers kicked in to slow trading down.
The stock slump proved that Friday's disappointing debut could not simply be blamed on technical glitches at Nasdaq, the stock market where Facebook has listed. Traders who put in or withdrew orders on Friday found that their requests did not always get registered, and the start of trading had to be delayed by half an hour.
Nasdaq apologised for the glitches.