Facebook Drops on Its Lock-Up Expiration
By: Facebook shares closed down more than 6 percent Thursday as the lockup expired on 271 million shares. Volume spiked, with over a hundred million shares exchanged hands by mid-day. That’s up over 160 percent from the ten-day average.
Now we’re watching to see if any of the insiders are selling — if they sell Thursday, SEC filings aren’t due until the end of day Monday. (Related: Accel Unloads Facebook on Its Own Investors: Sources).
With the stock’s decline, its market cap is now below $50 billion, the valuation at which Goldman Sachs bought in. And Microsoft , which invested at a $15 billion valuation, is also sitting on much smaller gains than it was going into the IPO. (Related: Can Facebook Unlock Value?)
Other shareholders who can now sell stock today include Russian investment firm DST, and early investor Peter Thiel, who recently converted 9 million class B shares into Class A shares, giving him more flexibility to sell. (Related: Who Has Option to Sell Facebook After Lock-Up?)
A list of venture capital firms are also on the list: Elevation Partners, Greylock Partners, and Tiger Global.
Leading into today’s lockup expiration, and ever since the IPO, Facebook shorts have been on the rise. As of Wednesday, 4.7 percent of shares outstanding were on loan to short sellers, that’s up more than 50 percent from the 3 percent on loan a month ago, and also more than 50 percent higher than the S&P 500’s 3 percent average.
—By CNBC's Julia Boorstin
@JBoorstin
