Facebook investors nervous as shares drop to new low

Facebook shares slid to a new low Tuesday as nervous investors fled the company's shares, concerned about the social network's long-term business prospects and an initial offering price that proved too rich.

Shares of the social network fell 10% to an all-time low of $28.65, before recovering slightly to $29.01. It closed at $28.84. Since its market debut on May 18, the company has shed about $25 billion in value.

Wall Street has harbored concerns that Facebook would have difficulty translating its growing mobile presence into revenue.

Analysts say apart from the challenge of earning money off smartphone and tablet users, Facebook -- which relies on advertising for most of its revenue -- may also find it difficult to lure large advertisers.

Days before Facebook's market debut, General Motors announced it was pulling out of paid advertising on the site, citing potential concerns about the lack of evidence that advertising on Facebook led to strong returns on investment.

Skeptics argued that Facebook's starting valuation of more than $100 billion -- about equivalent to that of Amazon.com -- was too high.