Facebook stock hits record low as early investors drop stock
Facebook stock hits record low as early investors drop stock

                      
                      
          Following the expiration of Facebook's lockup agreements rules Thursday, Facebook’s stock price has continued to drop, reaching an all-time low. Many early investors likely dumped some of their shares, significantly expanding the number of shares eligible to be traded, which marks yet another rough patch for Facebook in its first several months as a public company.
Lockup agreements rules, as written by the Security and Exchange Commission, attempt to prevent insider trading by restricting such trades for a certain period, typically 180 days. In Facebook’s case, that limit ended Thursday morning.
Now, an additional 271 million shares—increasing the available volume by 60 percent—have been made available. But, as more of these lockup agreements rules expire in the coming months, even more Facebook shares will become available.
As Bloomberg reports: “The shares freed up today make up only 14 percent of the 1.91 billion that will be available for sales in the coming nine months.”
In other words, this isn’t a very good omen for CEO Mark Zuckerberg.
“Buckle your seatbelts for the next couple of months until they make it through all these shares coming unlocked,” Tom Forte, an analyst at Telsey Advisory Group in New York, told Bloomberg.
Since the company’s initial public offering this spring, the stock has continued to fall. Facebook has never traded higher than its initial public offering price of $38 per share. Since then, the company barely made analysts’ estimates for quarterly earnings last month, which also saw a 10 percent drop in after-hours trading following that call.
Facebook CFO David Ebersman commented on the stock’s drop during that call, saying, "We're disappointed at how the stock has traded, but we're the same company we were before."


          
                      
                  