Facebook Shares Plunge Nearly 4 Percent As Company’s OWN Employees Dump Shares
- The stock fell 83 cents to close at $21.11
- The company fell 3.79 percent after trading 99 million shares
- CEO Mark Zuckerberg says he won’t sell his shares until September
Facebook’s market value was attacked on Wednesday by its own employees when they dumped millions of shares in the company.
The social networking giant closed the day at 3.79 percent after 99 million shares changed hands.
The company’s stock fell 83 cents, closing at $21.11 on Wednesday. The stock is down 44 percent from its IPO price of $38.
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Facebook CEO Mark Zuckerberg Says He Won’t Sell His Shares This Year
Wednesday marked the first time employees, who own 234 million shares, were able to sell their Facebook shares.
A lock-up period, which forced them to hold on to their shares after the company’s IPO, ended on Monday.
However, Monday and Tuesday the markets were closed due to Superstorm Sandy, forcing employees to wait until Wednesday.
On average, 50 million shares of Facebook stock are traded every day. Trading volume shot up to more than 9 million on Wednesday.
The company’s IPO in May was valued at $38 per share. The price was $21.11 at the close of trading on Monday.
Nasdaq Chart Shows Facebook Shares Ended the Day at Just Over $21
CEO Mark Zuckerberg does not sell. He has already said that he will not sell shares until September next year.
A total of 234 million additional shares and stock options held by employees became eligible to flood the market on Oct. 15.
Lock-ups are common after IPOs and are intended to prevent a stock from experiencing the kind of volatility that can occur if too many shareholders decide to sell at once.
Facebook saw its biggest one-day gain last Wednesday after posting strong third-quarter results.
The day before, Facebook first disclosed how much money it makes from mobile ads. Mobile has been a concern since the IPO of the Menlo Park, California company.
Facebook’s stock has not fared well since its IPO in May amid concerns about its ability to continue growing revenue. But the next lock-up expires on November 14, when 777 million shares and stock options are eligible to be sold.