Facebook Shares Plummet After Lock up Period

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Facebook Shares Fall Again Following the end of the First Lock-up Period

By piranha

20th August 2012

Following the end of the first lock-up period, Facebook shares have fallen heavily. At the close of trade in New York on Wednesday 15th August 2012, shares had fallen by over 6% from $20.74 to $19.87.

Around 421 million shares have been trading since May 2012, when the shares were floated at $38 each.

On Thursday 17th August 2012, about 271 million shares became eligible to be sold, following the end of the first lock-up period, which prevents sales by those who invested early.

The lock-ups usually start to expire 90 days from the IPO (initial public offering) and are designed to prevent too many investors selling at once and causing share prices to fluctuate wildly.

A further 1.6 billion shares could come on to the market over the next few months as further lock-up periods expire.

Amid worries over its strategy, Facebook’s share price has fallen dramatically since its floatation in May.

As users move towards accessing the Facebook site via mobile phones as opposed to a computer desktop, there are concerns over their revenue streams and whether money can be made from people using the site via mobile devices.

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