( 4UMF NEWS ) Facebook Shares Plunge:
Facebook’s stock plunged to a new low Thursday after the expiration of a ban that had prevented some early investors and insiders from dumping millions of additional shares they own in the social-networking leader.
Facebook (FB) stock traded as low as $19.69 this morning before bouncing back to $19.91 in midday trading Thursday. It finished the day off 6.3%, with a closing price of $19.87. That’s 47.7% below its initial public offering price of $38.
By noon, nearly 100 million shares had traded — more than three times the average volume on a full day.
Firms ranging from Accel Partners to Goldman Sachs, Zynga CEO Mark Pincus and Facebook board members James Breyer, Peter Thiel and Reid Hoffman were among those free to sell stock they own, after the lifting of a ban known as a lock-up period. If many of them took advantage of that, Facebook’s stock could decline because the market would be flooded with nearly two-thirds more shares.
It’s not known whether any of those investors have sold any shares. The stock price decline could also be reflecting other investors’ anticipation of selling by those insiders.
On Tuesday, shares of online review service Angie’s List suffered the biggest one-day drop and closed at a new low following the expiration of a similar ban. The price dropped, even though there was no word on whether any major investors had dumped their shares.