Facebook shares drop below IPO price

Facebook's shares are trading lower on their second day on the NASDAQ. In pre-market trading this morning, the company's shares dropped 4.37 percent to $36.56, leaving them below their initial $38 offering price and their first-day close of $38.23. Facebook's shares rose to a high of $45 on Monday before flirting with falling below their initial price. It was believed that the stock was buoyed by underwriters to ensure it didn't slip below $38. Aside from Facebook finally going public, the big story on the day was Nasdaq delaying its opening due to a technical glitch. In a statement, Nasdaq chief executive Robert Greifeld told reporters yesterday that his company was "humbly embarrassed" by its issue, adding that it was "not our finest hour." More importantly, Greifeld said that Facebook's quick drop from $42.05 to $38 on Friday had nothing to do with the glitch. Regardless, the drop and subsequent softness in demand have sparked some fear among investors and industry observers over whether Facebook was priced too expensively at its start. However, more long-term thinkers don't think it's time to get paranoid about Facebook's shares or their prospects of long-term success. Two days of trading is nothing, and early losses can be made up quite quickly. Wedbush analyst Michael Pachter is among many that believes Facebook will see its shares soar in the coming months. In a note to investors today, he said that he expects the social network's stock to rise to $44 in the next 12 months. Sterne Agee analyst Arvind Bhatia said earlier this month that he expects the company's shares to jump to $46 over the next year.