Facebook shares plunge to new record low as early backers sell following end of 'lock-in period'
Facebook shares sank to a new record low after early investors were allowed to sell over 271 million shares following the end of a 'lock-up' period, which prevented pre-IPO investors from selling their stakes.
According to The Telegraph, Facebook, which made its debut on the US stock exchange, NASDAQ in May, in one of the most anticipated flotations in years, initially sold 421 million shares, but the expiry of the 'lock-up period' meant that pre-IPO investors were free to sell a further 271 million shares, increasing the number of tradable securities by more than 60 percent.
Among the largest holders freed from the lock-up were venture capital firm Accel Partners, Elevation Partners, which is backed by Irish singer Bono, and Microsoft, the paper said.
Facebook's IPO was marred by controversy, with glitches on NASDAQ on the first day of listing which delayed its trading for more than 30 minutes.
Further lock up periods would expire as the year progresses, with an extra 1.44 billion shares being released for sale over the next 9 months, prompting more worries for Facebook over further falls in the price, the paper added.