Facebook stock falls 11 percent in second trading day
Facebook shares close down $4.20 in Monday trading. Facebook stock dropped so much Monday morning that 'circuit breakers' kicked in to restrict sell orders.
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By mid-afternoon on Monday, though, there were indications that investors might be coming back in to Facebook. The stock was well off the lows of the morning, and some market players saw an entry point forming.Skip to next paragraph
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"We see 38 percent of the ideas on Facebook are short and 62 percent have a more long bias," said Tim Murphy, general manager for the Americas at TIM Group, which transmits and tracks equity trade ideas from 750 brokerage firms for institutional investors globally. "Brokers are saying to their clients there is a good opportunity here."
Still there was a long list of questions -- ranging from whether the underwriters priced the shares too high to how well prepared the Nasdaq was to handle the biggest Internet IPO ever -- and few easy answers.
"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it; that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
Nasdaq said Monday morning the changes it was making would prevent a repeat of what happened Friday, when glitches prevented some traders from knowing for hours whether their trades had been completed.
The exchange also said it would implement procedures to accommodate orders that were not properly executed last week, which could ultimately lead to compensation for some investors.
"It doesn't instill confidence for clients. Talk about trying to convince them it isn't a casino," one Midwestern financial adviser told Reuters on Monday.
Separately, a source said Morgan Stanley's brokerage arm still had a "large number" of share orders from Friday that were not confirmed, which it was working to resolve.
A Facebook spokeswoman declined to comment on the share price issue.
Some financial advisers, who might have been furious last week at getting left out, were counting themselves lucky by Monday that they did not get their clients involved.
"By pure luck I failed to talk it up with a lot of clients because I didn't think I would be able to get much," said one Raymond James adviser, who sought, and received, only 500 shares for one client.
"I basically told people they weren't going to get any, and luckily, it proved to be a bust," the adviser said.