Facebook shares hit all-time low as lock-up expiration lets insiders sell

[n2doc]

Dominic Rushe in New York

Facebook's shares fell to new lows in early trading Thursday as insiders were freed to sell another 270m shares.

The expiration of a lock-up period for insiders increased the pool of available shares by 60%. Facebook's share price fell close to 7% in early trading to $19.73, a level that is more than 46% lower than the $38 IPO price set in May.

Goldman Sachs, Elevation Partners, which counts U2's Bono as a partner, and DST Global are among the early investors that will now be allowed to sell more shares. Goldman and DST were among the investors who increased the number of shares they sold at $38 shortly before the IPO.

Facebook's shares have been hit hard as analysts have worried the firm has yet to figure out a way to make money from mobile users, the fastest growing of their business. After such a precipitous fall in share price, analysts are split on whether investors will take advantage of the end of the lock-up to sell more shares.

One analyst, who wished to remain anonymous, pointed to Angie's List, a referral service, whose share price plummeted on Tuesday after its IPO lockup expired. "I wouldn't even think of buying this until the price comes down," he said.

http://www.guardian.co.uk/technology/2012/aug/16/facebook-shares-drop-lock-up

[Ikonoklast]

1. I give it ten years, tops.

You know there is someone working like the very devil right now on a social media site that will blow FB out of the water.

MySpace, FaceBook,...next shiny object.

[monmouth]

2. I find this very, very interesting and wonder why?

"One analyst, who wished to remain anonymous, pointed to Angie's List, a referral service, whose share price plummeted on Tuesday after its IPO lockup expired."

[cbdo2007]

3. Which part are you questioning???

These companies have a 3-6 month freeze on their employees selling shares. Once they are able to sell shares they do cause it's the big windfall they've been waiting for. Then it floods the market with more shares so the price comes down. Supply and demand.

[monmouth]

4. Oh I understand that, I'm wondering why Angie's List dropped so dramatically...n/t

Last edited Thu Aug 16, 2012, 03:11 PM - Edit history (1)