Facebook shares have plummeted since the company began its much-anticipated life as a publicly-traded firm last Friday.
While trading glitches at the Nasdaq on the company’s opening day are widely seen as contributing to the sell-off, the stock’s lingering shortcomings are raising questions about whether or not lead underwriter Morgan Stanley (along with other banks) misgauged the demand, and the price of the deal.
Tuesday comes new revelations that analysts at these firms (Morgan Stanley, and likely others) were reducing estimates about Facebook’s financials at the same time their IPO colleagues were upping the size and price range of the IPO.
The question now turns to: what did these underwriters know, when did they know it, and which investors were told?
-By CNBC's Jesse Bergman and Bertha Coombs
@jbergmancnbc & @coombscnbc