That brought Facebook stock below its $38 IPO price on the second official day of trading -- and it brings the valuation down from $104 billion to $92 billion in the blink of an eye.

"Facebook's IPO priced at a level well above where we foresaw compelling 12-month returns," BTIG analyst Richard Greenfield said in a research note Monday. With revenue and earnings growth decelerating in 2012, "we find Facebook's current valuation unappealing."

What Have You Done for Me Lately?

Darren Hayes is a professor at Pace University's Seidenberg School of Computer Science and Information Systems in New York who began a 10-year career in the financial services industry in 1990 as a stock analyst with Cantor Fitzgerald at the World Trade Center. We asked his thoughts on Facebook going forward.

Hayes said there was no question that Facebook had enjoyed enormous success. But as a former investment banker, he was quick from Day One to remind the watching world that true investors don't care about what you did yesterday but "what will you do for me tomorrow?"

"There are some significant challenges that lay ahead for the company. Serious questions have been raised about the effectiveness of marketing through social media Web sites," Hayes said, noting that General Motors announced last week that it was dropping Facebook advertising because it felt Facebook garnered only half the user clicks that Google could accomplish.

The Privacy Impact

Despite the financial challenges, Hayes is in the camp that sees a larger short-term challenge: new European Union privacy legislation. The Data Protection Directive is being overhauled as the EU Parliament is looking to introduce new online privacy legislation. This legislation is largely the antithesis of what exists for online companies in the U.S.

Hayes said that under the new legislation, which could be introduced as early as 2013, consumers will not be opted-in by default to having their information shared with third parties, and companies like Facebook will be required to seek permission from the user before sharing personal information. What's more, consumers will have the right to request that their information be permanently removed from an online company's databases.

"Privacy by default will inevitably have a serious impact on advertising revenues for Facebook, who received around 85 percent of their $3.71 billion in revenue last year from advertising. There are approximately 500 million citizens of the EU," Hayes said.

"An EU mandate has already been issued to online companies to provide a new standard for using cookies; consumers must be allowed to opt out of their information being shared with third parties. Online companies have been warned that failure to comply will result in significant fines, and an inability to provide a solution will result in a new standard being imposed on them later this year."

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