• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

Loading...
See More

Facebook shares fall as lock-up expires

Oct 31 2012 17:16 Reuters

Related Articles

Man accused of trying to cheat Facebook

Facebook mobile growth allays fears

Top Facebook exec joins Tech City

The next big Facebook

Games play into Facebook's future

Facebook exec on damage control mission

 
New York - Facebook Inc shares fell 4% in busy trade early on Wednesday as the company allowed employees to start selling some stock.

The world’s largest social network waived a provision that prevented employees from selling shares until November 14. As a result, Facebook staffers were able to sell their vested shares on Monday. About 234 million shares held by employees were eligible for sale in the public market.

However, because the markets were closed on Monday and Tuesday in the wake of powerful storm Sandy, Wednesday was the first trading day.

“I don’t really understand why Facebook (chose) to unlock virtually all of its compensation within the year of its IPO, but they did,” said Michael Pachter, an analyst with Wedbush Securities.

“They made a mistake and set the company up for volatility.”

More than 1 billion Facebook shares held by employees, insiders and early investors are set to become available for trading by year’s end.

Facebook suffered a painful public debut earlier this year, as investors worried about the company’s ability to keep up revenue growth and the large pool of additional shares in the lock-up that are now hitting the market.

Wall Street also has cast a gimlet eye on Facebook and its ability to attract mobile revenue as more people turn to smartphones and tablet devices to access the Web.

Last week, Facebook said it increased mobile advertising revenue at a faster than expected pace, totaling $150m in the third quarter. Estimates had pegged mobile revenue at $40m to $50m in the second quarter.

Shares of Facebook are down more than 40% since the IPO. The stock was down 3.8% at $21.11 on Wednesday morning, off an earlier low at $20.73.
facebook

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:

SMALL BUSINESS

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

Top 10 richest musicians of all time

Check out the gallery to find out who they are!

 
 

Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote

Loading...