Facebook stock 'lockups' expire, stock falls to new low
updated 05:10 pm EDT, Fri August 17, 2012
November lockup expiry cause of some concern
Facebook's stock hit a record low Friday, sinking to just over half the IPO price, as insiders and the first investors in the company became eligible to unload the shares "locked up" by federal trading restrictions since the commencement of sales. Experts said in response to the drop that the value of the stock and company could plummet further if early purchasers and employees saturate the market with their shares of stock as more lockups expire before the end of the year.
Michael Pachter of Wedbush Securities said that the stock "is off on the hype created by the media." Facebook is expected to report earnings for the current quarter in October, just three weeks before the biggest grouping of 1.22 billion insider-owned shares is eligible for sale on November 14.
Companies generally impose "lockup" status on insider shares for three months to a year after an IPO to regulate the release of shares on the free market to prevent exactly what's been happening to the share price. Traders reported that the volume of Facebook shares involved in transactions on Thursday an Friday were unusually high. Disclosures of a change in holdings by major shareholders if they sold when the lockup expired will be reported to the SEC next week.
After an IPO price of $38 per share, Facebook stock closed at $19.21 per share, and had fallen to $19.05 in after-hours trading, a loss of more than a five percent since midnight. Market capitalization has dropped to $42.6 billion since the IPO.





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Joined: 01-03-08
And on the same day Apple's stock hits an all-time high. Zuckerboy doesn't seem to have that arrogant smirk on his face much these days...more like the look of someone whose feeling the rug being pulled from under him.