Morgan Stanley, the lead investment bank in Facebook's troubled initial public offering, will compensate retail investors who overpaid when they bought Facebook's stock in Friday's IPO, according to a source familiar with the matter.
The source said the firm is reviewing orders its retail clients placed for Facebook stock, and will make price adjustments if they paid too much.
The source did not say what amount constituted overpaying for Facebook's stock.
The social network's initial public offering was highly anticipated but the stock closed nearly flat on its first trading day at $US38.23.
Morgan Stanley and Facebook face at least two lawsuits over the IPO. Both suits allege that analysts at the large underwriting investment banks cut their second-quarter and full-year forecasts for Facebook just before the IPO and told only a handful of clients. Morgan Stanley has declined to comment on the lawsuits. Facebook has called the lawsuits "without merit".
On Thursday, Facebook's stock closed up $US1.03, or 3.2 per cent, at $US33.03. This gives the company a market value of $US90.4 billion, down from $US105 billion at the end of trading on Friday.
Meanwhile, a New York broker has asked Nasdaq to compensate it for up to $US35 million ($A36.01 million) in losses on the Facebook IPO because of the market's computer problems on the first day of trade.
Knight Capital said in a filing to the US Securities and Exchange Commission late on Wednesday that it had submitted a claim to Nasdaq over losses related to Friday's computer problems, which disrupted buy and sell orders during the launch of the $US16 billion IPO and caused havoc at many brokerages.
"As has been well-publicised, there were numerous issues and problems at Nasdaq relating to the trading of Facebook. Some market participants, including the Company, suffered sizable losses," Knight said in the filing.
"The company estimates its total pre-tax loss related to the events associated with the trading of Facebook to be in the range of $30 to $35 million."
Knight said it had submitted claims for "financial accommodation" from Nasdaq, and that it was weighing all possible options under the law.
But it said it had no assurances it will recover any of the losses, and that its second-quarter earnings results would be affected.