Facebook’s stock hit a hew low after a ban on certain early investors and insiders was lifted after the standard 90 days. Firms ranging from Accel Partners to Goldman Sachs, Zynga CEO Mark Pincus and Facebook board members James Breyer, Peter Thiel and Reid Hoffman were among those free to sell stock they own, after the was ban, known as a lock-up period, was lifted.
The stock for Facebook was 6 percent down, or $1.20, from Wednesday’s close and about 48 percent below its initial public offering price of $38. If the stock hits $19, it will have lost half its value since Facebook went public in May.
Though it is unclear how much stock had been sold, nearly 100 million shares had traded by noon, more than three times the average volume on a full day. It’s yet another blow to Facebook, which saw a botched public offering, where trading glitches marred its first day.
Investors continue to be concerned over Facebook’s revenue stream from increasingly mobile users. Those not eligible to sell stock on Thursday were CEO Mark Zuckerberg, who will be ineligible until November.
Other shareholders, including many Facebook employees, will be able to sell beginning in October and the last lockup period expires next May, a year after the IPO. In all, up to 1.91 billion more shares could flood the stock market over the next several months, or over four times the 421 million shares that have been trading since Facebook’s IPO; 271 million shares of those 1.91 billion became eligible for sale Thursday.
Source: The Associated Press {link no longer active}
