LOS ANGELES, CA (Catholic Online) - After last week's flat close and Monday's 11 percent plunge, Facebook shares closed 8.9 percent lower at $31 on volume of 101 million shares. Facebook has shed more than $19 billion in market capitalization from its $38-per-share offering price last week.

Adding speculation to the IPO failure was Reuters reporting that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering.

According to sources familiar with the situation, JPMorgan Chase and Goldman Sachs, also underwriters on the deal revised their estimates during Facebook's IPO road show as well.

Morgan Stanley selectively disclosed the change in Facebook estimates, Reuters reported, which drew the attention of the main regulator of U.S. brokerages.

"That's a matter of regulatory concern to us and I'm sure to the SEC," Richard Ketchum, the Financial Industry Regulatory Authority's chairman and chief executive says. "And without saying whether it's us or the SEC, we will collectively be focusing on it."

Securities and Exchange Commission Chairman Mary Schapiro said investors should be confident in investing, but she conceded there were questions to answer as well.

"I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook," she told journalists.

Investors have sought out almost any related vehicle to bet against following the Facebook debacle. Prices plunged on two closed-end funds that owned pre-IPO shares over the past three days. Firsthand Technology Value Fund and GSV Capital Corp both dropped more than 25 percent even though their Facebook holdings make up only a small fraction of assets.

"Until investors can actually short Facebook, they have to keep shorting other things that can give them some sort of proxy for Facebook," Thomas Vandeventer, manager of the Tocqueville Opportunity Fund says.

Brokers who over-ordered shares in the expectation that supply would be limited continued to complain they received too much stock to handle and were left in the dark about forecast changes.

One adviser from Morgan Stanley Smith Barney pointed out the fact that institutional investors received information that retail investors did not, calling it "a huge issue for the entire industry.

"Night and day the institutional clients get things that we don't get. It's a big issue," the adviser said.

Thomson Reuters Starmine conservatively estimates a 10.8 percent annual growth rate, almost exactly the mean for the technology sector -- which would value the stock at $9.59 a share, a 72 percent discount to its IPO price.

The sole bright spot for Facebook was news that it had agreed to settle a proposed class-action lawsuit over its "Sponsored Stories" feature.

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