There are reports by Reuters that two top US financial regulators have said that the issues around the initial public offering of Facebook should be reviewed, putting fresh pressure on the company, its embattled lead underwriter and the Nasdaq.
Securities and Exchange Commission Chairman Mary Schapiro said investors should be confident in investing, but she conceded there were questions to answer as well.
"I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate,
but there are issues that we need to look at specifically with respect to Facebook," she told reporters as she exited a Senate Banking Committee hearing.
After Friday's nearly flat close and Monday's 11 percent plunge, Facebook shares closed 8.9 percent lower at $31 on volume of 101 million shares. At that price the company has shed more than $19 billion in market capitalization from its $38-per-share offering price last week.
Investors were still shaking their heads over the botched opening trading of Facebook when Reuters reported late Monday that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering, information that may not have reached many investors before the stock was listed.
JPMorgan Chase and Goldman Sachs, which were also underwriters on the deal, each revised their estimates during Facebook's IPO road show as well, according to sources familiar with the situation. As reported by Reuters.
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