Social Networking, Facebook Ipo | featured news

Executives at the Internet company are pinning much of the blame on Nasdaq, according to several people close to the company and its underwriters, who spoke on the condition of anonymity because of continuing shareholder lawsuits. Tensions remain so high that Facebook is still considering switching exchanges and is weighing the costs of such a move, these people said.

UBS is sitting on losses that could be as high as $350 million stemming from its investment in the Facebook initial public offering, and is preparing legal action against Nasdaq as a result, people familiar with the matter told CNBC.

Nasdaq OMX Group Inc said it will offer cash and rebates totaling $40 million to compensate clients affected by the problems with Facebook Inc's initial public offering.

Facebook’s post-IPO performance has been poor. But is it so poor that it will hurt the prospects for other startups? The short answer: Almost certainly.

Although many investors had hoped for a big first-day pop, Facebook's stock opened on May 18 at $42.05 and fluctuated between $45 and $38 throughout the day. It closed barely above its IPO price, at $38.23. Since the IPO, the stock has been down on seven trading days and up on four. Facebook's stock price has gone as low as $26.44 since the IPO.

Facebook's stock has fallen below $30 for the first time since its much-awaited public debut this month.

Independent analysts have issued price targets ranging from below $25 a share to nearly $50, while bloggers, day traders and others have trotted out valuations that pin Facebook as low as $6 a share. At $38 a pop, nobody liked Facebook.

The fallout from Facebook Inc's messy initial public offering widened on Wednesday as shareholders sued the social network and its bankers while a trading firm revealed a massive loss on the shares and threatened to seek "remedies."

Two top U.S. financial regulators said on Tuesday the issues around the initial public offering of Facebook should be reviewed, putting fresh pressure on the company, its lead underwriter, Morgan Stanley, and the Nasdaq stock exchange.