One of the inevitabilities of negative news about a company is that it begets more negativity - people start to look for patterns that might prove that the initial bad news was just the tip of an iceberg. When word came out last week that demand for the stock was so high that insiders planned to sell even more shares at the open, many industry folks I spoke to began to wonder if the "greater fool" theory was kicking in. In other words, these people wondered, if the bankers and early investors in Facebook were increasing the number of shares they were selling at the outset, perhaps they knew something the general public didn't - maybe they thought that $38 was as high as the stock was going to get - at least for a while.
Not only is the theory kicking in, but everyone it seems, is starting to put the boot in. Is the Facebook tall poppy being cut down to size, where they just too greedy, or did Facebook's CFO, and the banks, completely screw it up?