Facebook drops again as pressure to perform mounts (Reuters) - Facebook's shares fell again on Tuesday, leaving them down nearly one-third from Friday's highs as questions mounted over the company's financial prospects and its ability to grow fast enough to meet the hype surrounding its stock. After Friday's nearly flat close and Monday's 11 percent plunge, the stock tumbled again Tuesday -- 4.2 percent to $32.60 in the first 90 minutes of trading. That was a decline of 28 percent from Friday's high of $45, but well off its lows of the morning. Volume was again massive, with more than 45 million shares traded as of around 11 a.m. That followed turnover of 168 million shares Monday and 581 million on IPO day. Investors were already shaking their heads over the botched opening trading life of Facebook when they got the news late Monday that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering. Both JPMorgan Chase and Goldman Sachs, which were also underwriters on the deal, revised their estimates during the roadshow as well, according to sources familiar with the situation. One mutual fund source said they had never, in a decade of experience, seen an underwriter cut a company's outlook during the roadshow prior to an offering. Investors said the challenge for the young company is to prove it can grow aggressively, to justify its lofty valuation and demonstrate its maturity. "Wall Street is a severe task master and they're going to want to see quarterly results, then guidance, then subsequently they're going to want to see that guidance beaten, and then the guidance raised," David Rolfe, chief investment officer of Wedgewood Partners, said on Monday evening. As bad as the declines have been, there is still a view that it remains overvalued. With Monday's closing price of $34.03, the market implied a 24 percent annual growth rate for earnings over the next 10 years -- a rate that would rank above 90 percent of the companies in that industry. Thomson Reuters Starmine, meanwhile, more conservatively estimates a 10.8 percent annual growth rate, which would value the stock at $9.59 a share, a 72 percent discount. Similarly, the company's price-to-earnings ratio remains lofty, even after the selloff. The $34.03 price implies a forward P/E of 59, compared with Google's 13.3 forward price-to-earnings ratio (for a similar rate of growth). Pressure remains intense on Nasdaq, which has shouldered much of the blame for trading failures last Friday. The exchange has already set aside money to compensate customers for bad trades, but some are warning its ability to snag future big IPOs is at risk. Barry Ritholtz, the widely followed financial blogger and chief market strategist at Fusion IQ in New York, took all sides -- Facebook, Morgan Stanley and Nasdaq -- to task in the sharpest terms on his blog Tuesday. Thus, what we see are a series of bad decisions made by Facebook's executives going back many years. The insiders got greedy, too clever by half, in how they used secondary markets. They picked a bad banker and an awful exchange," Ritholtz said. Reporting By David Gaffen, Edward Krudy and John McCrank in New York and Alistair Barr, Alexei Oreskovic and Noel Randewich in San Francisco; Writing by Ben Berkowitz in Boston; editing by Edward Tobin and Maureen Bavdek