Facebook Shares Fall to New Low as Lockup Expirations Begin has the story:
Facebook Inc. shares fell to a new low Thursday, on volume that doubled typical daily levels within the first hour of the session, as rules expired that had restricted some early investors from trimming their stakes.
{NOTE: The shares are down more than 5% for the day at $20 currently, after selling for an all-time low of $19.76 earlier in the session. Meanwhile, the overall market is up today.}
So-called lockup agreements rules prohibiting early investors from selling stock began expiring Thursday, making 271 million additional Facebook shares eligible for sale—though holders could also choose to keep some, or all, of their shares. Pre-IPO investors still hold the bulk of Facebook's stock, but lockup expirations could see some two billion of the company's shares hit the market between now and next May....
Lockups are a common practice as companies go public, especially firms with substantial private-equity or venture-capital backing. The banks underwriting the deals typically require selling shareholders to hold on to a portion of their stakes in order to reassure investors that their interests will remain aligned and to help raise the stock price through scarcity."
Summary
The Facebook selling continues with no end in sight.
My view remains that it's best to avoid trying to catch a falling knife.
And the price of Facebook shares definitely is falling.
Thanks. Bob.
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