Blackstone Group shares tumbled more than 6 percent in morning trade, falling below the $31 price the private equity giant fetched in its initial public offering last week.
The units traded as low as $30.36, down 6.4 percent, after losing nearly 8 percent on Monday. They jumped 13 percent in their market debut on Friday.
Analysts said the second-day decline was partly tied to investor concern that the private equity market may have run out of steam.
Others have also pointed to concerns about Blackstone's lofty valuation and a bill in Congress that would raise the tax rate on private equity firms' profits to 35 percent from the current 15 percent.
"That's a little contagion there. There's some people who think the top of the private equity binge was marked when Blackstone became public," said Elliot Spar, market strategist with Ryan Beck in New York.
"Blackstone has no earnings visibility, and the private equity market has topped out," said Francis Gaskins, president of IPO research firm IPOdesktop.com.
Gaskins said there was a shortage of big deals in the United States, and too much private equity money was chasing too few deals, leading to a move by management to cash out. "They want to get liquid," he said.
Blackstone Chief Executive Stephen Schwarzman's personal stake in the firm he co-founded rose by $1 billion to $8.75 billion based on the units' closing price of $35.06 on Friday.
At $30.36 per unit, Tuesday's lowest trading price, Schwarzman's stake would be worth $7.58 billion, a decline of more than $1 billion.
The units represent pieces of the Blackstone private partnership.