Share price falls to less than $20.
Facebook’s share price value has plunged to less than $20 as early backers of Facebook were given their first chance to sell their shares after the lock-up period expired. It seems that many took this opportunity gratefully. Over 156 million shares were traded, more than five times the stock's average volume over the past month. Shares fell to as low as $19.69 before making a slight recovery to close at $19.87 last night, down $1.33.
The high volume of trading has led some analysts to believe that some early investors were cashing in on their investments, while others are simply getting out while they can. A breakdown on the number of major investors who have sold their stock will not be available until next week at the earliest. Investors who became eligible to sell their stock include the likes of venture capital firms Accel Partners and Greylock Partners; investment banker Goldman Sachs, Microsoft, and Zynga CEO Marc Pincus. However, these early investors can still reap huge windfalls by selling now despite the decline in stock price.
When Facebook went public, shares were being sold at $38 as the company was valued at $104 billion. However, it has been a turbulent time since for the company’s share price which has halved in value. Concerns have been raised over Facebook’s ability to display advertising to a growing number of mobile users.