Facebook shares drop over 10% in second day of trade

Facebook shares have fallen below the initial public offering price of $38 in their second day of trading in New York.

The share price dipped more than 13% several times during the day, closing almost 11% down from Friday's close at $34.03.

Some analysts blamed banks who advised Facebook for pricing the shares too high. Some criticised the decision to raise the opening price just ahead of the flotation, while others said Facebook flooded the market by floating too many shares.

Facebook shares initially jumped to about $42 a share on the day of the IPO, but settled around their initial price of $38.

Disappointed investors were hoping for a first-day pop, according to the San Francisco Chronicle.

The drop on the second day of trade appeared to confirm the views of analysts who said Friday's flotation was overvalued, said the Guardian.

Despite Facebook's share price fall, the paper noted that the Nasdaq index ended the day up 2.46% to 2847.21, as US stocks rebounded from their worst week in a year.

Apple was among the market risers, with share prices up by almost 6% to close at $561.28 on Monday.