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Facebook stock 'lockups' expire, stock falls to new low

updated 05:10 pm EDT, Fri August 17, 2012

November lockup expiry cause of some concern

Facebook's stock hit a record low Friday, sinking to just over half the IPO price, as insiders and the first investors in the company became eligible to unload the shares "locked up" by federal trading restrictions since the commencement of sales. Experts said in response to the drop that the value of the stock and company could plummet further if early purchasers and employees saturate the market with their shares of stock as more lockups expire before the end of the year.

Michael Pachter of Wedbush Securities said that the stock "is off on the hype created by the media." Facebook is expected to report earnings for the current quarter in October, just three weeks before the biggest grouping of 1.22 billion insider-owned shares is eligible for sale on November 14.

Companies generally impose "lockup" status on insider shares for three months to a year after an IPO to regulate the release of shares on the free market to prevent exactly what's been happening to the share price. Traders reported that the volume of Facebook shares involved in transactions on Thursday an Friday were unusually high. Disclosures of a change in holdings by major shareholders if they sold when the lockup expired will be reported to the SEC next week.

After an IPO price of $38 per share, Facebook stock closed at $19.21 per share, and had fallen to $19.05 in after-hours trading, a loss of more than a five percent since midnight. Market capitalization has dropped to $42.6 billion since the IPO.

by MacNN Staff



  1. pairof9s

    Senior User

    Joined: 01-03-08

    And on the same day Apple's stock hits an all-time high. Zuckerboy doesn't seem to have that arrogant smirk on his face much these days...more like the look of someone whose feeling the rug being pulled from under him.

  1. besson3c

    Clinically Insane

    Joined: 03-03-01

    I think Facebook will continue its success, but I think it will always be stuck in looking for new star products rather than depending on old cash cows which may eventually become completely milked.

    We've mocked Google Plus, but Google has quietly done a pretty good job in building something that is the hub of a number of their products and serves a purpose beyond simply being a Facebook competitor. Maybe if Facebook popularity starts to dwindle, Google will swoop in and hope that people abandon Facebook in mass droves?

    Has anybody written some sort of Facebook exporter/Google importer, or vice versa?

  1. chefpastry

    Mac Enthusiast

    Joined: 11-14-05

    Zuckerberg and the media hyped the stock up to it's limit at the IPO. Then reality set in many began to realized they couldn't justify the $100B valuation for a company that is having trouble capitalizing on mobile. Also, the way Zuckerberg spent $1B to purchase the little start up, Instagram, was a bit scary. Will he continue to spend so frivolously? The next thing that scares me about FB is having seen Friendster and MySpace die. Who's to say that won't happen to FB one day?

    Why anyone would invest in FB with a 100x P/E instead of AAPL which has a P/E of 15x is beyond me. AAPL is growing by leaps and bounds each quarter, pays a dividend, has locked in millions upon millions of customers in to their ecosystem, and a proven record of success.

  1. ruel24

    Fresh-Faced Recruit

    Joined: 09-17-09

    I think Facebook has seen its peak in its lifespan when the whole Egypt thing was going on. Unfortunately, with changes Facebook has made, time and time again, to make the user experience worse, but better to mine more information for them, many users I know either don't get on nearly as much, or at all anymore. I really believe they're headed toward either a lesser used, but sustainable existence, or something will come along and replace it, soon.

  1. PJL500

    Fresh-Faced Recruit

    Joined: 06-18-11

    All the hype was just another attack on the individual investor by Wall Street. High frequency mechanisms, available only to the institutions, makes short look like a buggy whip.

  1. bleee

    Mac Enthusiast

    Joined: 03-28-02

    Originally Posted by chefpastryView Post

    Zuckerberg and the media hyped the stock up to it's limit at the IPO. Then reality set in many began to realized they couldn't justify the $100B valuation for a company that is having trouble capitalizing on mobile.

    Everyone is having trouble capitalizing on mobile, the fact is that nobody is in the mood to click on ads when they are using a mobile device.

    They just want to get work done, very rarely have I bought anything on a mobile devices because I was always afraid of missing out on something that is available on desktop or tablet experience. For example I can't use my Amazon points on a purchase that I make on my mobile phone because it just does not offer the ability to apply your Amazon points to purchase from the mobile app.

  1. blahblahbber


    Joined: 02-01-05

    Jeez, this commenting system is getting worse by the week.... anyhow, FaceBook will eventually end up like Friendster and Myspace like chefpastry said; like I told many folks already.... Don't invest in Facebook.... it will be a quicker death. It's competitor is Google in terms of ad sales (and crApple) . It just gets old just like the dead social sites that once where all the talk. Those that did invest, have not learn from the past, but they will learn at some point. Facebook does not have any real tangible sales, nothing really to back up its IPO, pure hype like Apple... except Apple has real tangible products, where FB does not. It will go the way of the dodo like its similar models in the past. Wonder if Steve Jobs taught Mr. ZuckerB how to ruin this company so it can be part of a takeover. Lesson is, don't trust Steve Jobs... He has lied to everyone like 1984. Should anyone want to take advice from your rival?? Stupid and silly for Zucker to even allow Steve to "help" out. By the way, anyone want to Ping me? hahahaha

  1. SockRolid

    Forum Regular

    Joined: 01-21-10

    Dot-com bubble 2.0.

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