Facebook Shares Take a Dip on Lockup Expirations
As more than 200 million shares of Facebook were freed up for trading on Wednesday morning, the social giant’s stock price fell to $20.94 per share, a 5 percent decrease from the previous closing price.
Shares began trading for the first time since Friday of last week, after U.S. stock exchanges were forced to suspend trading on Monday and Tuesday as Hurricane Sandy hit the East Coast, shutting power off to hundreds of thousands in Manhattan and the outer boroughs.
The reopening of the markets coincided with the Facebook employee stock lockup expirations, which could have contributed to the dip in share price.
Lockups are built into IPO plans for many private companies going public, staggering the opportunities to cash in shares, in order to stabilize the stock price. This is the second of a series of lockup expirations for Facebook; the largest will come mid-November, when more than one billion shares will be available for trading.
In midday trading, shares of Facebook leveled off around $21.08, a 4 percent drop from its opening price.