Robert_Charlton - 11:21 pm on Aug 16, 2012 (gmt 0)
Facebook hits new low as IPO lock-up ends
AP News - BloombergBusinessWeek
August 16, 2012
SAN FRANCISCO (AP) — Facebook's stock plunged to a new low Thursday as some of the social networking leader's early backers got their first chance to sell their shares since the company's initial public offering went awry....
...Given that most of these investors put their money into Facebook five to eight years ago, they probably were eager to sell, said Sam Hamadeh, CEO of PrivCo, which researches privately held companies.
...Hamadeh believes the venture capitalists who invested in Facebook realize it's a "fool's game" to wait for a better price on the stock....
I heard some Public Radio discussion yesterday, though, which suggested that a drop at the end of the lock-up period is to be expected, and rule of thumb is that a drop of more than 10% is essentially a vote of no confidence by insiders. The drop today was down "more than 6 percent"... which is less than 10.
That said, the stock is almost 50% below its IPO price. The details of who sold today won't be public for a few days, and other restrictions about who can sell will be removed in coming months.