FACEBOOK shares plunged to a new low yesterday as early investors were able to sell their stock for the first time after the lock-up period in force since May’s initial public offering (IPO) came to an end.
The stock fell as much as seven per cent to a low of $19.69 – less than half the peak it reached on its first day in trading – as an extra 271m shares were added into the market. The owners of yesterday’s unlocked stock were those who had invested in Mark Zuckerberg’s company before the IPO including Goldman Sachs, one of the banks that underwrote the flotation, Microsoft, and Russian investment managers DST Global. Another 1.77bn shares are set to hit the market over the coming months and the market will keep a keen eye on 14 November, when the biggest tranche of shares – including the majority owned by Facebook staff – will be unlocked.
The social network saw a slump in its share price last month as its first public results showed that it is failing to maintain profit margins.