Facebook freeing more shares
Facebook is freeing up 271.1 million of its shares today, boosting by 60 per cent the number that could be traded and adding to concerns that have weighed on the stock since the company's initial public offering.
Early Facebook investors such as DST Global, Goldman Sachs, Elevation Partners and Accel Partners get a green light today to start selling part of their holdings, California-based Facebook has said in filings.
That's after the lifting of restrictions designed to prevent a flood of shares immediately after an IPO.
The prospect of more stock sales means Facebook will need to work even harder to persuade investors that it deserves a higher valuation, compared with earnings, than all but two of its closest competitors including Google.
The shares freed up today make up only 14 per cent of the 1.91 billion that will be available for sales in the coming nine months.
"Buckle your seatbelts for the next couple of months until they make it through all these shares coming unlocked," Tom Forte, an analyst at Telsey Advisory Group in New York, said.
The shares subject to today's lock-up expiry are worth about $5.75 billion, based on yesterday's closing price, and represent almost six times the average daily trading volume in Facebook stock.
The restriction is being lifted for early investors, excluding Facebook chief executive officer Mark Zuckerberg, who sold part of their holdings in the IPO.