Facebook shares fall after IPO

Associated Press

NEW YORK

Facebook was supposed to soar. Instead, it plunged.

After the social network’s stock fizzled Friday in its long-awaited debut, its stock fell 11 percent Monday, even as the rest of the stock market rallied.

The downward spiral has left some people sitting on big losses, and others scratching their heads. After all, nothing fundamental has changed at Facebook in the past week since the much-hyped company came to the stock market — Facebook still has more than 900 million users, its 28-year-old founder, Mark Zuckerberg, controls the company, and it is still one of the few profitable Internet companies to go public.

Facebook’s IPO —like Netscape’s in 1995 and Google’s in 2004 — was billed as a milestone moment. Netscape’s offering ushered in the era of the Internet browser. The company’s stock more than doubled in its first day of trading. Google’s IPO heralded the age of search. It posted an 18 percent gain in its stock-market debut. Facebook was supposed to offer proof that social media is a viable business and more than a passing fad.

But investors don’t seem convinced. Facebook’s stock closed Monday at $34.03, down 11 percent from Friday’s closing price of $38.23. The investment banks that arranged Facebook’s offering set a price of $38 Thursday.