Facebook IPO lock-up ends

Facebook stock hits all-time low as IPO lock-up ends


Shares of the social network fell lower than ever in early Thursday trading as early investors, insiders were given option to exit


Facebook’s stock hit another pothole along its bumpy Wall Street ride on Thursday as some of its early investors were freed up to dump shares.

The stock hit a fresh record low, dipping below $20 for the first time since its May debut and falling about 48% from its $38 initial public offering price.

The expiration of a temporary ban on selling, called a lock-up, following the social network’s stunningly underwhelming IPO meant about 271 million additional shares were eligible for sale.

That is just the first of 2 billion shares to be unlocked in coming months, potentially setting off a burst of selling and pushing the stock even lower.

Lock-ups are meant to keep insiders from unloading shares immediately after they go public.

“We think there's a good chance additional lock-up expirations will lead to similar selloffs,” Morningstar IPO analyst James Krapfel told the Daily News.

Facebook’s stock, which has been buffeted by worries that the company’s growth may not match its lofty valuation, ended the day down 6% at $19.87.

Among those who got a green light to sell their sizeable stakes were PayPal co-founder Peter Thiel and rocker Bono’s Elevation Partners. CEO Mark Zuckerberg, who founded the company in his Harvard dorm room, can’t sell until November.

Facebook has lost more than $40 billion in market value since its IPO, and Zuckerberg’s net worth has shrunk to $10 billion.

Still, early investors will likely be able to reap a hefty profit by selling, Krapfel said. “Most people who would be eligible to sell are still are well ahead on their investment.”

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