Facebook's stock tumbled down past its offering price in morning trading on Monday, May 21, and stayed below that level, following a less than stellar debut.
After closing on Friday, May 18, at $38, Facebook (FB) opened at $33.83 on Monday morning, down 11 percent.
Wall Street insiders are attacking the much-hyped social network stock saying that they essentially scared away investors.
Talks of whether Facebook could monetize its 900-million-strong user base, as well as whether CEO Mark Zuckerberg really cared enough to make sure his shareholders are happy, are among the arguments made that would explain the sinking of the stock price.
Another significant factor being argued is that the Nasdaq exchange, which houses many of the market's biggest tech names, had trouble matching orders Friday morning and missed the expected 11 am Facebook kickoff.
They should have delayed it, Dave Rovelli, managing director of US equity trading at Canaccord Genuity in New York, told CNBC. They shouldn't have opened until 1 o'clock (Friday), until they fixed the glitch.
While some blame the late opening more than others, the stock still managed made a run for it at the late opening, but then strolled through most of the day before finishing modestly higher at $38.23, thanks to some strong defense played by Morgan Stanley, in an effort to protect the opening price.
But after Monday's uninspiring day of trading, the stock, which continues to be capped off with questions marks, is still looking like a pretty big gamble.
All the buy-side institutions are shorting it. You can get a borrow on it and everyone's leaning all over it. There's no bottom, Rovelli said in the CNBC interview. The next catalyst is going to be earnings, which is three months away. So there's no reason to jump in here. You're catching a falling knife.
This comes as no surprise to some insiders who said from the beginning that Facebook was a stock to stay away from until the company and its investors could really get a better picture for how it would generate serious revenue.
According to a CNN interview that took place before the Facebook IPO debut, Matt McCall, president of Penn Financial Group, suggested that the week after the stock's debut, day traders and short-term investors tend to sell off their shares in hopes of making a quick buck.
And as other factors continue to come in to play for Facebook and its investors, some insiders are looking at those uncertainties as something that makes the stock avoidable - for now.
Unless you really want it in your portfolio I would wait for stability, says Phil Silverman, managing partner at Kingsview Capital in New York. It was a total fiasco on Friday. I was really surprised it went down. It just showed you that at this point there's time to buy.
The continuing problems with Facebook's stock price - after all the hype and expectations that it would soar and perhaps end the market's May selloff - could mean more expected damage to the perception of the social network stock.
It leaves a bad taste in everyone's mouth, Rovelli told CNBC. 'We're trying to get the retail investor back on board, and everyone who bought it is getting creamed.