Facebook shares could fall below IPO price: Reports

Shares in social media company Facebook Inc could fall below the initial public offering price of $38, Barron's wrote in its May 21 edition.

Facebook saw its shares rise a scant 0.6 percent to $38.23 on Friday in the first day of trading.

The stock stayed above the $38 IPO price, supported in the market by the deal's underwriters. But Barron's said the "big question" this week will be whether they continue to do so.

Its shares still look overpriced compared with rivals such as Google Inc, and all the more so given Facebook's challenges in drawing revenue from mobile device users, the financial weekly wrote.

Facebook's shares also face the prospect of pressure from heavy sales of stock between now and the end of 2012 if early and inside investors get rid of shares ahead of a potential rise in capital gains taxes, according to Barron's.

In another development, an analyst working with a New York-based firm has that Facebook's shares were implausibly priced for "perfection" leading him to put a 'sell' rating on the stock.

Brian Wieser, an analyst at Pivotal Research Group cautioned clients against buying Facebook shares.

His recommendation came less than 24 hours after Facebook's stuttering debut, marred in part by technical difficulties, which saw its shares end the day just 23 cents higher than its float price, at 38.23 dollars, valuing the company at 104.2 billion dollars.

"While we like the company, we're troubled by investors' perception of the risks,' The Sunday Telegraph quoted Weiser, as saying.

"It's priced for perfection and that's clearly implausible," he added.

Despite amassing over 900million users and tripling its profits to 1billion dollars, Facebook faces the challenge of squeezing more advertising from the site without angering the users that are its chief asset.

The need that Facebook will have to make further acquisitions, and a still unproven advertising model are two of the reasons why Pivotal argues Facebook shares are worth just 30 dollars each.

"None of this is to take away from the fantastic success of the company. It's just not consistent with the economics," the paper quoted Weiser, as saying.