Facebook Shares Slump To New Low
Facebook Shares Slump To New Low, Shares in the firm hit a new low after a ‘lock-up’ period stopping some insiders selling their stakes ended. Facebook shares hit new low as lock-up expires, Facebook shares have hit a record low after a “lock-up” period that prevented some insiders from selling their stakes came to an end.
Shares in the social media network plunged to a session low of $19.69 in New York, almost half their listing price of $38. They hit a high of $45 on the first day of dealing.
Facebook listed on Nasdaq (Nasdaq: ^NDX – news) in May, in what was one of the most anticipated flotations in years. The company initially sold 421m shares, but the expiry of a lock up period yesterday meant pre-IPO investors were free to sell a further 271m shares, increasing the number of tradable securities by more than 60pc.
Among the largest holders freed from the lock-up were venture capital firm Accel Partners, Elevation Partners, which is backed by Irish singer Bono, and Microsoft (NasdaqGS: MSFT – news) . PayPal founder Peter Thiel was also free to cash in.
Further lock up periods expire as the year progresses, with an extra 1.44bn shares freed up for sale over the next 9 months, prompting worries that there could be further falls in the price.
Facebook’s initial offering was marred by controversy, with glitches on US exchange Nasdaq on the first day of listing delaying trading for more than 30 minutes.
There was also concern about the pricing by Wall Street bankers, as the shares have continued to plunge since the underwriters stopped supporting the shares on the first day of dealing.