Can the price of Facebook shares go lower? Or will they rise? Analysts are mulling what will happen once early purchasers of shares of the social media giant are given the greenlight to unload their shares.
According to the NY Times, Facebook CEO Mark Zuckerberg has announced that he will keep his shares but his employees will be free to sell their company shares later this fall:
Facebook employees and early investors will be able to sell hundreds of millions of shares at the end of October, which could reduce prices. The first lock-up, as this is known, will expire on Oct. 29, the company announced, moving up the date slightly. At that point, employees will be allowed to cash in approximately 220 million shares.
Another window will open in mid-November, when employees will be able to cash in approximately 780 million shares, followed by a third in December, and a final one in May 2013.
It's been a tough year for Facebook. Despite being a darling of the business press and the world at large - it has 922 million users worldwide, according to Wikipedia - Facebook's initial public offering stumbled out of the gate thanks to Nasdaq's tech complications and subsequent charges of price inflation after its debut in May. Since then, the news has only gotten worse: the once hotly anticipated IPO has seen its stock plummet from $38 a share on its opening day to close yesterday at $17.73 – almost half of its asking price.
And people are fleeing the stock. The NY Times reports that angel investor Peter Thiel of Accel Partners has already dumped his Facebook stocks while early investors such as Marc Andreessen and Donald Graham plan "to sell their shares as soon as they are able to, to pay their tax bills."
If Facebook's stock had a 'Like' button, I doubt anyone but Zuckerberg would click it.Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio