Brendan Mcdermid / Reuters

Commuters pass by the Nasdaq Marketsite in New York.

Shares of Facebook continued to slide Tuesday, even as the broader market managed a modest gain, as fallout from the company's IPO last week continued.

The social network’s share price was lately down 3 percent, adding to a decline of 11 percent seen in Monday's session. Facebook is now down 27 percent from Friday's intra-day high of $45 a share. (Track Facebook's stock price here.)

Facebook's market debut on Friday was beset by problems, so much so that Nasdaq said on Monday it was changing its IPO procedures. That may comfort companies considering a listing, but it does little for Facebook, whose lead underwriter Morgan Stanley had to step in and defend the $38 offering price on the open market. 

Facebook, its investment bankers and the Nasdaq market have come under fire for not making sure one of the most anticipated market offerings in recent memory happened smoothly.

When a stock falls below its offer price so soon after an IPO it is considered a disappointment for the company, particularly when the IPO is the most heavily traded ever and concerns such a high profile company.

A number of reasons for the stock decline have been offered by observers. Some pointed to underwriters offering too many shares, while others blamed an overly strong IPO price and worries about slowing revenue growth at the social network.

Also, Reuters reports that Facebook’s lead underwriters -- Morgan Stanley, JPMorgan and Goldman Sachs -- cut their revenue forecasts for the company in the run-up to the company’s $16 billion IPO.

Related: Blame game begins after Facebook debacle

The broader market was edging higher Tuesday amid news that Japan's sovereign rating was cut by Fitch as a political stalemate dimmed chances the country could curb its snowballing debt.

Fitch lowered Japan's long-term foreign currency rating to A plus from AA. It cut the local currency rating to A plus from AA minus. Both were cut with a negative outlook.

The United States and Japan are leading a fragile economic recovery among developed countries that could be blown off course if the euro zone fails to contain the damage from its problem debtor states, the OECD said on Tuesday.

Nasdaq OMX faces short-term costs from its botched handling of Facebook shares on their first day of trading on Friday, but longer-term repercussions could be more expensive as it struggles to restore its image.

Initially, the exchange said it planned to set aside $13 million to resolve bad trades; even if all of that was used, the cost would be minimal compared with the $387 million in net income it reported last year.

China will fast track approvals for infrastructure investment to combat a slowdown in the economy, a state-backed newspaper reported on Tuesday, underlining a call by Premier Wen Jiabao for policies to maintain growth.

Stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak, as equities rebounded from their biggest weekly drop in almost six months.

Reuters contributed to this report.

Richard Drew / AP

A television reporter stands inside the Nasdaq MarketSite in New York as Facebook's shares fall.

The stock market rallied Monday, but Facebook’s shares sank in the first day of trading without the full support of the company's underwriters.

Facebook's market debut on Friday was beset by problems, so much so that Nasdaq said on Monday it was changing its IPO procedures. That may comfort companies considering a listing but does little for Facebook, whose lead underwriter Morgan Stanley had to step in and defend the $38 offering price on the open market.

Without that same level of defense, its shares fell 11 percent Monday from Friday's intra-day high of $45 a share, closing just below $34. (Track Facebook's stock price here.)

"At the moment it's not living up to the hype," Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago said, adding that some people may have decided to hang back and buy the stock on the declines.

"Look at the valuation on it. It might have said 'buy' to a few people, but boy it was awfully rich," he said.

The losses wiped some $19 billion off of the company's market capitalization -- not far from what Chief Executive Mark Zuckerberg was worth personally when the stock debuted.

Related: After Facebook IPO debacle, finger-pointing begins

Volume was again massive, with more than 96 million shares trading hands in the morning session alone, making it by far the most active stock on the U.S. market. Nearly 581 million shares were traded on Friday.

"One of the things that we are seeing in Facebook is a lot of emotional trading, in that over the weekend much of the media coverage was negative, and that could be weighing on investors' decisions to get out of the stock," said JJ Kinahan, TD Ameritrade's chief derivatives strategist.

The drop was so steep that circuit breakers kicked in a few minutes after the open to restrict short sales in the stock, according to a notice from Nasdaq.

Shares in other one-time Internet darlings fell in lockstep with Facebook on Monday, with Yelp, LinkedIn and Zynga all lower.

As Facebook fell, there was a long list of questions -- ranging from whether the underwriters priced the shares too high to how well prepared the Nasdaq was to handle the biggest Internet IPO ever -- and few immediate answers.

"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The broader market fared better. The Dow Jones industrial average close the day up 135 points.

Nasdaq said Monday morning the changes it was making would prevent a repeat of what happened Friday, when glitches prevented some traders from knowing for hours whether their trades had been completed.

Related: Trading expert on Facebook IPO debacle

The exchange also said it would implement procedures to accommodate orders that were not properly executed last week, which could ultimately lead to compensation for some investors.

"It doesn't instill confidence for clients. Talk about trying to convince them it isn't a casino," one Midwestern financial adviser told Reuters on Monday.

Separately, a source said Morgan Stanley's brokerage arm still had a "large number" of share orders from Friday that were not confirmed, which it was working to resolve.

A Facebook spokeswoman declined to comment on the share price issue.

But analysts said that after the initial frenzy, investors were quickly becoming cautious about the stock.

"Investors are increasingly aware of the risk embedded in the stock price. There are real concerns about growth and advertisers' frequent lack of certainty how best to use Facebook, along with rising costs and ongoing acquisition risk," said Brian Wieser at Pivotal Research Group, who has a $30 target on the stock.

"At $38, the stock is priced for perfection in a manner that implied that risks were negligible."

In earnings news, Lowe's Cos Inc, the world's second-largest home improvement chain, cut its fiscal-year earnings outlook and said demand slowed toward the end of the traditionally strong first quarter.

Yahoo shares rose after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion in a deal that moves the Chinese e-commerce leader closer to a public listing.

Reuters contributed to this report.

Brendan Mcdermid / Reuters

Monitors show the value of Facebook's stock Monday morning in New York.

Facebook stock's slide continued Monday, leaving some investors wondering about the outlook for the newly public social network.

Facebook's stock tumbled below its $38 IPO price on its second day of trading. By Monday afternoon the company’s share price was down 10 percent from Friday’s closing price of $38.23. (You can track the performance of Facebook’s stock price here.)

When a stock falls below its offer price so soon after an IPO it is considered a disappointment for the company, particularly when the IPO is the most heavily traded ever and concerns such a high profile company.

A number of reasons for the stock decline were offered by observers. Some pointed to underwriters offering too many shares, while others blamed an overly strong IPO price and worries about slowing revenue growth at the social network.

Investors and technology industry watchers are closely tracking the Menlo Park, Calif.-based company's shares. Facebook's initial public offering was one of the most anticipated ever and now serves as a bellwether for other social media companies.

“There must have been some sober second thoughts about this,” said Brian Wieser, an analyst at Pivotal Research Group who was first to come out with a “sell” rating on Facebook's stock on Friday.

Daniel Ernst, principal at Hudson Square Research, said he still thinks Facebook is “a fantastic company.”

“Fifty-three percent operating margins, 901 million users around the world. … They can provide detailed targeting to advertisers,” he told CNBC. He noted that many investors want to own Facebook’s stock, but for some the stock’s multiple -- a method for valuing companies and their stocks -- is too high.

“I really think we are in inning one of Facebook growth,” he said. “I really think Facebook has something; for me, it’s just a question of price.”

Related: Facebook drops below $38 IPO price

Facebook’s market debut Friday suffered some hiccups.

Initial trading on the Nasdaq was delayed for half an hour due to issues with some orders. The stock closed Friday just a few cents above where it priced Thursday night. Although many investors had hoped for a big first-day pop, Facebook's stock opened Friday at $42.05 and fluctuated between $45 and $38 throughout the day before closing at $38.23.

Underwriting banks reportedly had to step in and buy shares to avoid the embarrassment of seeing the stock close below its IPO price on the first day of trading.

Bob Greifeld, chief executive of the Nasdaq stock market, admitted Sunday that technical issues had tarnished Facebook’s debut as a public company but argued that the technical glitches had not had an impact on the performance of the shares.

Thomas M. Joyce, chairman and chief executive officer of trading firm Knight Capital Group, appeared on CNBC Monday to dissect Facebook’s first-day IPO flop Friday, and he laid the blame at Nasdaq’s door.

“This is arguably the worst performance by an exchange on an IPO -- ever,” said Thomas M. Joyce, chairman and chief executive officer of trading firm Knight Capital Group. "The failure was Nasdaq’s.”

Joyce argued that the Nasdaq snafu hurt the stock price.

“This was simply a technology problem,” Joyce told CNBC. “This was like your server going down, except on a massive scale. And instead of stepping back and rebooting, they kept plowing ahead.”

Wedbush analyst Michael Pachter, who came out with an "Outperform" rating on Facebook before its IPO, said investment banks that arranged the offering overestimated the demand.

Last week the bankers, led by Morgan Stanley, increased the offering price range. On Wednesday, the size of the offering was increased. Both moves appeared to signal strong demand for the shares.

Related: Nasdaq ‘embarrassed’ about Facebook delay

“The late addition of 84 million shares to the offering overwhelmed demand, limiting the first day price,” Pachter said in a note to investors.

Deutsche Bank’s Brad Miller, an expert on pricing IPOs, said the trading glitch was due in part to the fact that it was difficult to find a comparable company, or a competitor, to use when valuing the company.

Most IPOs value companies at well below $25 billion, compared with more than $100 billion for facebook when it went public.

“It does create a bit of an issue,” he said on CNBC.

Miller said Facebook’s lackluster performance might make investors wary of investing in future IPOs.

“Investors may take a pause after how the Facebook transaction has traded,” he said, adding that market volatility is also an issue.

“April was the worst month in terms of money flows since 1984, and May is trending in that direction, so we need a turnaround in volatility,” he said. “I think we are going to take a pause here in the new issue market (until we see the) macro issues subside.”

The Associated Press contributed to this report.

Ng Han Guan / AP

Gerry Lopez, CEO of AMC Entertainment Holdings, center left, exchanges documents with Zhang Lin, vice president of Wanda during a signing ceremony for Dalian Wanda Group Co. to acquire AMC Entertainment Holdings in Beijing, China.

Chinese conglomerate Dalian Wanda Group agreed to buy AMC Entertainment for $2.6 billion, including debt, making it the biggest theater operator in the United States.

The deal, the largest overseas acquisition by a privately held Chinese company, reflects the warming ties between the U.S. and Chinese movie industries after China agreed in February to open its cinemas to more American films.

The purchase will mark Wanda's first investment outside of China and its first foray into the United States and Canada, the world's biggest film market with ticket sales of $10.2 billion. Chinese cinemas trailed with $2.1 billion in revenue last year.

"For Wanda, the deal may allow it to secure more Hollywood movies for distribution in China in the long run," said Steve Chow, an analyst with Kingsway Research in Hong Kong.

"Cinema operation is a growing business in China as people are willing to spend on entertainment as their income increases. In the U.S., it is a defensive business which generates a relatively steady income," Chow said.

AMC and Wanda had held off-and-on discussions about a possible deal more than a year ago. Talks grew serious after AMC, the world's largest operator of IMAX screens, cancelled its plans to go public, according to media reports.

The acquisition by Wanda, controlled by billionaire Wang Jianlin, will include about $1.9 billion of net debt, a source with knowledge of the matter said. AMC is partly owned by Apollo Investment Fund and Carlyle Group.

"Wanda has also made a commitment to invest up to $500 million for operations," Wang, who is also Wanda's chief executive, told reporters in Beijing on Monday.

"We will continue to invest cash after the merger. The cash will be used for updating hardware and reducing debt," Wang said.

Wanda, which has interests in commercial properties, luxury hotels, tourism and department stores, holds $35 billion in assets, with annual revenue reaching $16.7 billion.

The deal also highlights the rising appetite of Chinese private sector companies for overseas assets. China's state owned enterprises have so far dominated large global acquisitions.

Earlier this year, privately owned Sany heavy Industry , controlled by China's richest man Liang Wengen, agreed to buy Germany pump maker Putzmeister for 360 million euros ($472 million).

Landmark deal
The deal will surpass Chinese computer maker Lenovo Group Ltd's $1.75 billion purchase of IBM's personal computing business in 2004, according to Thomson Reuters data.

James Roy, a senior analyst with Shanghai-based China Market Researchers, described Wanda's move into international cinema operations as "very significant."

"AMC has a very established worldwide network of cinema and will give them an established brand," Roy said. "It is a good opportunity for the acquiring company to gain know-how and potentially to leverage that in their home market."

Wanda operates 86 theaters with 730 screens.

There could be more Chinese films shown through AMC following the acquisition, said Craig Ramsey, AMC's executive vice president and chief financial officer.

"We serve a diverse audience," Ramsey said. "There's a lot of Hispanic, a lot of African American, there's a lot of Asian. They like western products but they also like their own home-created products."

In February, DreamWorks Animation announced a landmark deal to build a production studio in Shanghai.

Last week, News Corp agreed to buy nearly 20 percent of Chinese film distributor and theater operator Bona Film Group Ltd for undisclosed terms.

AMC's losses
Citigroup advised AMC in the deal, while Ernst & Young was Wanda's advisor. Citigroup is now No. 4 in the Asia-Pacific ex-Japan M&A league table ranking so far this year, compared with No. 10 a year earlier, according to Thomson Reuters data.

In its due diligence, Wanda considered AMC's overall losses in 2010 and 2011.

"According to our evaluations, the reason for the losses is not that AMC management has problems," he said. "The main problem is it has too high a debt ratio. So we believe after the merger, things will look good."

AMC, especially in 2011, faced high fixed costs of maintaining so many theaters and a lack of hits from Hollywood, the main source of the company's films, Chief Executive Gerry Lopez said.

But the films "The Lorax" and "The Hunger Games" boosted AMC's revenue in March, the company's best March ever, while the blockbuster "The Avengers" made for a robust May, he said.

As of the end of last year, the second-biggest U.S. cinema chain operated 347 theaters with 5,048 screens. Revenues reached $2.5 billion.

Tennessee-based Regal Entertainment Group, the largest, operated 527 theaters with 6,614 screens. Sales totaled $2.7 billion.

AMC's management team at its Kansas City, Missouri headquarters and the company's 18,500 employees will not be affected by the deal.

The movie chain is owned by an investment group that includes Bain Capital, CCMP Capital Advisors and Spectrum Equity Capital.

Discuss this deal on our Facebook page.

Facebook via EPA

Facebook CEO Mark Zuckerberg rings the Nasdaq's opening bell from Menlo Park, Calif.

Updated at 4:00 p.m. ET: After jumping more than 10 percent at the start of trading, shares of Facebook pulled back in their market debut Friday, suggesting a cooler-than-expected reception for one of the most watched initial public offerings of stock of recent years.

Facebook’s stock jumped to $43 in initial trading, up about 13 percent from an IPO price of $38. But the stock quickly gave back some of its initial jump and fell as low as $38 in their first half hour of trading, at which point IPO underwriters stepped in to support its price, according to reports. Facebook’s share price eventually closed at just above $38.

The broader stock market was lower Friday, with social media stocks among the day’s biggest losers. Shares of LinkedIn, Pandora and Groupon were all lower.

Facebook’s opening trade was delayed. Its stock was originally due to begin trading on the Nasdaq stock market at 11 a.m. ET, but was delayed by about 30 minutes as traders experienced problems with changing and canceling orders they had submitted to the Nasdaq, The Wall Street Journal reported.

Despite the technical difficulties, retail demand for the Facebook offering was very strong, traders told CNBC, with an expected retail component of 15 percent to 25 percent. Trading volume in Facebook exceeded 100 million shares in the first three minutes of the stock’s trading, the Journal said.

Facebook’s market reception was unusual. Other recent big Internet IPOs have seen strong starts, including LinkedIn, which went public almost exactly a year ago at $45 a share and closed at $94 on a volatile first day of trading that saw its shares top $122 at one point.

Related: Want a piece of Facebook? Here's what you need to know

That means investors lucky enough to get in at the offering price were able to book an immediate paper profit of more than 100 percent or "flip" shares and cash in. Other investors paid as much as $122 a share for LinkedIn that day and were left with paper losses. (LinkedIn shares currently trade for about $100.) 

Groupon, another recent Internet IPO, leaped 27 percent on its opening day.

Earlier Friday, Facebook founder and CEO Mark Zuckerberg rang the opening bell for the Nasdaq stock market from Facebook’s headquarters in Menlo Park, Calif. Shares of Facebook are now trading on the Nasdaq under the symbol “FB.” (You can track the performance of Facebook’s stock price here).

Facebook went public after the close of trading Thursday at $38 a share, raising $16 billion in a landmark initial public offering that values the company at more than $100 billion.

Investment banks organizing the stock offering set the price at the top end of the range of $34 to $38 per share estimated by Facebook in a regulatory filing earlier this week.

At $38 a share, the offering values the eight-year-old company at $104 billion, making its IPO the largest-ever stock market debut for an Internet company. It will raise more than $16 billion for Facebook and selling shareholders, including Zuckerberg, and ultimately could raise up to $18.4 billion, assuming underwriters exercise their option for “overallotments” to meet strong demand.

Related: Facebook founder Zuckerberg opens trading at Nasdaq

Zuckerberg updated his profile on Facebook Friday morning, listing his company on the Nasdaq market.

Facebook has enjoyed remarkably swift growth. In just eight years the company has gone from a college service founded in a Harvard dorm to the third-largest public offering of stock in U.S. history, after stock offerings from General Motors and Visa.

The sky-high valuation of Facebook puts it a bit ahead of Web veteran Amazon.com, which has more than 10 times Facebook's $3.7 billion in revenue. But Facebook is growing quickly and posted $1 billion in profits last year, more than Amazon's $631 million.

The Associated Press contributed to this report.

When a world-renowned expert on initial public offerings has reservations about the upcoming Facebook IPO, it’s worth sitting up and taking notice.

Jay Ritter, Cordell Professor of Finance at the College of Business Administration at the University of Florida, appeared on CNBC Thursday morning to discuss his views on Friday’s much-anticipated stock offering from the social network.

“My concern with Facebook is that at the valuation that public market investors are going to be buying in at there’s very little upside potential left,” he told CNBC.

But, he added, it doesn’t necessarily follow that Facebook is overvalued.

“The bullish case for Facebook is, as Google has demonstrated, targeted search can be an extremely profitable business, and Facebook has that franchise with social networks and it’s a very defensible business model,” Ritter said.

Excitement for Facebook’s debut on the financial markets is high. So if you’re an individual investor, can you get a piece of the action, and should you?

The first thing to remember about IPOs is that they are not normally geared toward individual investors. Underwriting banks typically allocate IPO shares to their best clients, which include hedge funds, wealthy individuals and large institutional investors. These investors will get the right to buy a certain number of shares at the offering price, which Facebook set at $38 per share Thursday afternoon. (You can track the performance of Facebook’s stock price here).

Some smaller retail investors may get a few shares allocated, especially if they have a good relationship with a broker for one of the dozens of underwriting firms handling the transaction.

If you have not already been in touch with your broker, however, it is too late to even try get in at the offering price. The deadline to express interest was Tuesday afternoon at brokerages we checked with, and the deal reportedly is oversubscribed.

Your only option is to buy shares after they begin trading on the Nasdaq stock market, when the price will be set by the law of supply and demand.

“This is not a strategy for the faint of heart,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, N.Y. Intense interest in Facebook’s offering is likely to drive the price up sharply as soon as trading begins, meaning the first public trade could be well above the offering price.

Related: Facebook set for stock market debut

In an example of the type of pressure investors could face, LinkedIn, another social media company, went public almost exactly a year ago at $45 a share and closed at $94 on a volatile first day of trading that saw its shares top $122 at one point.

That means investors lucky enough to get in at the offering price were able to book an immediate paper profit of more than 100 percent or "flip" shares and cash in. Other investors paid as much as $122 a share for LinkedIn that day and were left with paper losses. (LinkedIn shares currently trade for about $103.) 

Facebook could easily see a similar first-day trajectory, but it is impossible to know. Online investors who place a general order for Facebook stock will get shares at whatever price happens to be prevailing at the moment.

“Is it a sound investment for a sensible portfolio? No," said Johnson. "Is it a worthwhile speculative investment? Sure, but you have to be fully prepared for something that could be a very emotional event. And I have the sense that [the IPO price] could be very overvalued.”

One good piece of news about Facebook’s IPO is there are plenty of shares up for grabs.

In a sign of intense investor interest, Facebook said early investors in the company will be selling more of their shares in the IPO, bringing the total number of shares available to as many as 421.2 million, up from a previous maximum of 337.4 million.

Still, despite the increased number of shares on offer, the hype and interest surrounding Facebook’s IPO are precisely why investors should be cautious about investing in the company, said Professor Anant Sundaram of the Tuck School of Business at Dartmouth.

“My concern is the market is pricing [Facebook] to perfection … and the kind of fundamentals that are premised in that valuation, growth and revenues and cash flows, are simply astronomical,” he told CNBC Wednesday. “Now it’s possible they could achieve that, but I think the probability is low.”

Sundaram also says the fact that founder Mark Zuckerberg will control more than 50 percent of the company’s voting rights after it goes public is “very, very troubling.”

While a handful of new technology companies, such as Google, have thrived under the tight control of their founders, the stock ownership structure at Facebook limits the ability of shareholders to take action if things go wrong. He said evidence shows tightly controlled companies are more likely to wasteful acquisitions, overpay employees and spend unnecessarily on capital expenditures.

Other technology companies, such as Microsoft and Apple, have fared well without that sort of governance structure, Sundaram said. 

“Basically, as investors we are being asked to liquefy and validate a lot of insider wealth, and being told to sit and zip your lips in the peanut gallery,” he said.

While Facebook is expected to get a big opening-day “pop,” Kathleen Shelton Smith, co-founder and chairman of IPO research company Renaissance Capital says it’s more important to track what Facebook’s stock price will be a week or a month after its initial trading day.

“For an IPO to work it has to trade higher over time after the initial trading day, and not all of them do,” said Smith. “So the challenge for the underwriters is to price the IPO where it can move higher over time.”

“The question is, over time will the company deliver the kind of performance that justifies its price? Every investor studying this company wants to work that out.”

For individual investors, it is worth remembering that Facebook shares will be available on Nasdaq for the foreseeable future. Would-be investors can wait a day or two and buy shares when the price is less volatile.

For investors interested in IPOs, but unable to purchase them directly, Smith suggests investing in a mutual fund that track the IPO market, such as the Direxion Long/Short Global IPO Fund (ticker: DXIIX) or the Renaissance Global IPO Plus Aftermarket Fund (ticker: IPOSX).

Investing in these funds might even be a smarter play than buying Facebook shares directly. Sundaram said there are many reasons to expect Facebook shares to fall after their opening day.

He pointed to similar technology companies such as Zynga, which have seen their share prices fall after the expiration of "lockups" that prevent company insiders and major investors from selling for at least 90 days after a stock is first publicly traded.

If Facebook shares manage to hold their value “that would be a remarkable achievement in my book,” he said.

Related:

Mr. IPO: Facebook could be a dangerous bet

Goldman could make $1.09 billion in Facebook IPO

Goldman Sachs could be one of the biggest beneficiaries of the Facebook IPO on Friday.

The investment bank plans to cash out 43 percent of its 65.9 million shares it owns in the social network.

Facebook said Wednesday in a regulatory filing that its shares will be offered in a range of $34 to $38 each. At the high end of that valuation, the 28.7 million shares Goldman plans to sell, more than twice the amount initially planned, will bring the bank a cool $1.09 billion.

Other major Facebook shareholders, including hedge fund Tiger Global and Russian billionaire Yuri Milner, have increased the amount of shares they plan to sell in Friday’s IPO, which is expected to be completed late Thursday and begin trading on the Nasdaq Stock Market on Friday morning under the ticker symbol “FB.”

The IPO is expected to be the largest ever for an Internet company, surpassing Google’s 2004 offering, and it could be worth more than $12 billion at the top of its valuation range.

Timur Emek / AP

The Facebook logo on a computer screen is shown. Now that Facebook has declared what it thinks the company is worth, it's time the company to hit the road and convince investors.

Now that Facebook has declared what it thinks it’s worth, it’s time for company executives to hit the road and convince investors.

On Thursday Facebook filed a document with regulators setting a price range of $28 to $35 per share for its initial public offering of stock, valuing the company at up to $96 billion and setting the stage for the biggest-ever Internet IPO.

The filing starts the period during which Facebook’s executives will meet with key investors to persuade them, ahead of an expected May 18 IPO, that the social media network deserves the high valuation. It would make Facebook the most valuable U.S. technology company at the time of its IPO, far ahead of Google’s $23 billion valuation in 2004.

Facebook executives met with major underwriting banks involved in the deal Friday, including JPMorgan Chase, to brief them on the IPO presentation.

In those meetings with bankers, known as “teach-ins,” company executives go over the talking points for its IPO “roadshow,” in which company executives present their case to analysts and potential investors in various cities. The Facebook roadshow is expected to begin as early next week.

Facebook executives led by founder, chairman and chief executive Mark Zuckerberg reportedly will hit New York, Boston, San Francisco, Chicago, Baltimore and possibly Los Angeles in the nine-day roadshow.

“A company will aim to visit the major financial centers in the U.S., and possibly overseas,” said Kathleen Shelton Smith, co-founder and chairman of IPO research company Renaissance Capital.

“These events typically happen in the form of luncheons,” Smith said. “They’ll be getting the word out to investors about the company, telling when they plan to price the IPO, and some of the larger investors may tell them how many shares they would want to buy and how much they’d be willing to pay.”

For a taste of what the presentation will be like, you can watch a 31-minute video published Thursday by Facebook, starring Zuckerberg and described as a "retail roadshow."

Underwriting banks will use feedback they gather during the roadshow to determine the offering price. That is the price that will be paid by favored investors, typically hedge funds, big institutions and wealthy individuals, at the time of the offering, currently estimated for the evening of May 17. Members of the general public would get their first chance to buy the shares the next day when trading opens, presumably at a higher price than the initial offering.

Facebook is expected to trade on the Nasdaq market under the symbol "FB."

While Facebook is expected to get a big opening-day "pop," Smith said it’s more important to track what Facebook’s stock price will be one week or a month after its initial trading day, Smith said.

“For an IPO to work it has to trade higher over time after the initial trading day, and not all of them do,” said Smith. “So the challenge for the underwriters is to price the IPO where the it can move higher over time.”

“The question is, over time will the company deliver the kind of performance that justifies its price? Every investor studying this company wants to work that out.”

Will small investors -- you and I -- be able to buy into the Facebook IPO? It’s not usually easy for individual investors to buy into hot new stock offerings, notes Smith.

First, a potential investor would need to open an account at one of the 33 underwriting banks, led by Morgan Stanley, JPMorgan Chase and Goldman Sachs. (You can find a complete list here.)

Unless you are one of your stock broker's favorite customers, you probably don't have much of a chance of getting Facebook at the IPO price.

A more realistic option could be to invest in mutual funds that track the IPO market, such as the Direxion Long/Short Global IPO Fund (ticker: DXIIX), or the Renaissance Global IPO Plus Aftermarket Fund (ticker: IPOSX), Smith said.

However, one ray of hope is a New York Times report that says Facebook executives and underwriters have discussed raising the number of shares that will go to retail investors. the newspaper said Wall Street executives estimate that the retail share could be as much as 20 to 25 percent of the offering, and some of that increase is likely to go to brokerage firms that cater to small investors, such as E-Trade, which Facebook recently added as one of its underwriters.

AFP - Getty Images

The logo of social networking website 'Facebook' is displayed on a computer screen.

Updated at 6:09 p.m. ET: Facebook has set a price range for its initial public offering of $28 to $35 per share, according to a regulatory filing, valuing the company at up to $96 billion and setting the stage for the biggest Internet IPO yet.

The IPO, expected this month, would raise up to $13.6 billion, of which nearly half would go to existing shareholders including company founder and CEO Mark Zuckerberg. The company will raise about $5.8 billion, assuming a midrange price of $31.50 a share, according to the company's filing with the Securities and Exchange Commission.

The preliminary price range would value the company at $77 billion to $96 billion, according to Reuters. That would be far higher than the previous record Internet IPO, which was Google, valued at $23 billion when it went public in 2004.

An IPO at the high end of the range would value Facebook at virtually the same level as Amazon.com, which has a market capitalization of about $103 billion. Facebook had net income of $1 billion on revenues of $3.7 billion last year, compared with Amazon's earnings of $631 million on total sales of $48 billion.

"People are going to be very comfortable with this valuation," Sam Schwerin of Millennium Technology Value Partners told Reuters. He said the price was conservative and predicted underwriters "will walk the range up."

The firm, which owns Facebook shares worth roughly $200 million, is not selling any in the IPO.

Facebook had revenue of just over $1 billion in the latest quarter, up 30 percent from year-ago levels, although profits were down because costs were sharply higher.

A total of 337.4 million shares will be sold in the offering, about 12 percent of the total outstanding.

Zuckerberg, 27, who will continue to dominate the company with 57.3 percent of the voting power under the company's two-class stock system. He could enjoy a $1 billion payday if the company goes public at the $35 level, because he is selling 30 million shares. His remaining stake of 503 million shares would be worth about $17.6 billion at that level.

Many analysts had expected Facebook to price its IPO even higher, at around $40 a share. Max Wolff, an analyst at Greencrest Capital Management, said Facebook had likely toned down the price range for the closely watched public offering because of the current subdued market mood.

“It feels to me that as market sentiment gets less bright, people are getting more nervous,” he told CNBC.

However, the Facebook IPO is still “a very big deal in every sense of the term,” he added, so it’s important for the 33 underwriting banks involved in the deal to see it go well.

The social media juggernaut, which plans to list its stock on Nasdaq under the ticker "FB," is wrapping up its prospectus with regulators and may begin its "roadshow" as soon as Monday, according to reports. During the roadshow, management will give potential investors a presentation touting its business.

Facebook’s roadshow will reportedly span New York, Boston, San Francisco, Chicago, Baltimore and possibly Los Angeles over eight or nine days. Based on that time frame, Facebook, the world’s largest social network, would be ready to go public in mid-May.

If all goes well, Facebook's stock would price May 17 and make its public debut May 18, The Associated Press reported.

Kim Kyung-Hoon / Reuters

Shares in Warren Buffett's company Berkshire Hathaway are down 2.4 percent since it held its last annual meeting on April 30, 2011, while the S&P 500 has advanced 2.8 percent over the same period.

Warren Buffett’s disciples are certainly a loyal bunch.

Investors in shares of Berkshire Hathaway (BRKA), now trading at around $121,775 a share, have missed out on the superior returns they would have received by investing in the plain vanilla Standard & Poor’s 500-stock index over the past year, data show.

The stock’s performance is likely to be a topic of conversation at Berkshire’s 2012 annual meeting for shareholders, to be held this weekend in Omaha, Neb.

Shares in Buffett’s company are down 2.4 percent since it held its last annual meeting on April 30, 2011, while the S&P 500 has advanced 2.8 percent over the same period. In fact, this is the third year in a row in which returns on Berkshire shares have trailed the performance of the S&P 500, Bloomberg reports.

The annual event is usually attended by thousands of investors and has been described as a Woodstock for capitalists, drawing in Buffett followers eager to hear the Oracle of Omaha’s views on the economy and the markets. Buffett and his deputy Charlie Munger often answer investors’ questions for hours.

On the eve of the Berkshire meeting on Friday, Berkshire is widely expected to report strong profits in its first-quarter earnings report.

Analysts expect Burlington Northern Santa Fe railroad, which Berkshire acquired in 2010, to be a strong contributor to first-quarter results. The company’s insurance businesses, including Geico and General Reinsurance, are also expected to contribute significantly to Berkshire’s profit.

Another topic of conversation at the annual meeting will likely be Buffett’s health, and also the succession plan for the company.

Last month, in a letter to shareholders, Buffett disclosed that he has been diagnosed with stage I prostate cancer and said he will begin a two-month treatment of daily radiation in mid-July.

“The good news is that I've been told by my doctors that my condition is not remotely life-threatening or even debilitating in any meaningful way,” Buffett, 81, said in the letter.

The news sent shock waves through the investing world, as investors contemplated the mortality of the man who has built enormous wealth for himself, his company and its shareholders.

The prognosis for Buffett’s health appears to be good (according to the American Cancer Society, most men diagnosed with prostate cancer do not die from it), but the announcement inevitably rekindled the debate over who will replace the legendary investor at the helm of Berkshire Hathaway.

Is is still worth investing with Buffett? Share your thoughts here.

Sang Tan / AP

Rupert Murdoch, right, and his son James Murdoch, left, have come under fire for their handling of the hacking affair last year that resulted in the closure of the News of the World.

News Corp.’s (NWS) board of directors said Wednesday it has “full confidence” in Rupert Murdoch’s fitness to continue to lead the international media company.

The statement, which came days after a British House of Commons committee report called Murdoch “not a fit person” to head a major international company, followed a meeting of News Corp.’s board of directors.

In its statement, the board said its decision was unanimous.

“The Board based its vote of confidence on Rupert Murdoch's vision and leadership in building News Corporation, his ongoing performance as Chairman and CEO, and his demonstrated resolve to address the mistakes of the Company identified in the Select Committee's report,” the statement said.

Rupert Murdoch and his son James have come under fire in recent months for their handling of the hacking affair last year that resulted in the closure of the News of the World tabloid.