Facebook shares finish 11 percent under flotation price

Published:  22 May at 6 PM

Shares in Facebook finished below the price where they were floated, amid concerns that the newly-listed firm can truly live up to investor expectations.

The shares first appeared on the Nasdaq exchange at $38 on Friday, but finished down by 11% on Monday. Some experts said that shares would have dropped on Friday if underwriters had not stepped in to purchase stock.

Critics say that company’s advisers have put the price far too high, while others say that it is still much too early to say. The social media group’s shares dropped by about 12% right after the Nasdaq opened, seeing a 9%-10% drop during most of the day until a later selling session.

On Friday, Facebook's offer price valued the company at $104 billion (£66 billion). Patrick Moorhead, an analyst with Moor Insights & Strategy, said the valuation was too high, arguing that the market was not valuing what the firm had to offer.

However, US-based global stockbroker BTIG said it was still too premature to judge the company. Valuing the social network giant is not so much science as it is art during this stage, said the firm in a statement. It added that the current situation of both mobile and social advertising is still uncertain.