FACEBOOK shares sank to fresh lows after early investors were allowed to ditch the stock for the first time since its flotation.
The social networking giant’s shares fell by 6% on Wall Street yesterday to set a record low below 20 US dollars (£12.7) after investors who bought into the company before it went public were allowed to sell up to 271m shares as a “lock-up” period expired.
Facebook has now seen some 49bn US dollars (£31.2bn) wiped from its value since its 104bn dollar (£66.2bn) flotation in May when it was priced similarly to giants Amazon and PepsiCo at 38 dollars.
The value of shares held by its chief executive Mark Zuckerberg has fallen to 9.9bn dollars (£6.3bn) from 19.1bn dollars (£12.2bn), although he already pocketed more than a billion dollars at the time of its flotation.
The drop in Facebook’s share price is being seen as a sign that insiders still think the stock is overpriced despite its recent falls – although some may simply be cashing in after a lengthy period of investment.
It is thought the stock will come under further downward pressure, as almost two billion shares are set to become eligible for trading when further lock-up periods expire over the next 10 months.
Facebook has 955m users worldwide, but it has had a rough ride as a listed company.
Its long-awaited stock market debut, which created a thousand millionaires – including a small number of the 100 London-based staff – was delayed by a technical glitch.