Mutual Funds Bail on Facebook

Usually, when big mutual funds invest in IPOs, they're in for the long haul. But that might not be the case with Facebook. Twenty-one mutual funds from Fidelity Investments, one of Facebook's earliest buyers, unceremoniously dumped more than 1.9 million public shares combined last month, with 16 selling more than a quarter of their stakes, the Wall Street Journal reports. They held the shares for at most six weeks—a far cry from their median hold time of 22 months.

Nor is Fidelity alone; Turner Investment Partners and OppenheimerFunds dropped large chunks of stock, too. "Some of these funds clearly thought it was going to be a hot deal that they could flip," said one mutual fund consultant. Instead, Facebook stock, initially priced at $38, hit an all-time low of $20.84 yesterday. "Fidelity managers are known to like to buy things in order to kick the tires and ask questions," says the editor of a Fidelity newsletter. Evidently "they don't like what they see." (More Facebook stories.)