More than 800 million shares of
are eligible for sale today after another round of lockup
So far, however, there has been no mass sell-off. In fact, the
stock is having its best day in nearly a month.
As of noon eastern time, Facebook shares were up 9% today,
rising as high as 10% earlier in the morning. That's in stark
contrast to past lockup expiration days.
"Lockups" are agreements that prevent major investors in a
given IPO - usually company executives and venture capitalists -
from selling their shares until a certain amount of time elapses
after the company goes public. Lockup agreements last anywhere
from 90 to 180 days, at which point early investors are
"released" from their obligations.
When the first wave of
occurred in mid-August - when 400,000 Facebook shares became
eligible for release three months after the company's IPO - the
stock plummeted 11%.
Last month, another 234 million
were freed from their lockup obligations, and the stock sank
So today's big gains are a major reversal - and a good sign
for the stock going forward. Today marked the last - and largest
- wave of lockup releases. All told, 1.85 billion Facebook shares
have become eligible for sale over the past three months courtesy
of lockup expirations.
Despite a few short-term setbacks, Facebook has managed to
weather the lockup-release relatively unscathed. When the first
set of lockup agreements expired on August 15, the stock was
trading at $21.20 a share. After this morning's move, the stock
is currently trading at $21.60 a share.
Suddenly, early Facebook shareholders aren't so eager to sell
off their shares. Perhaps it's a sign of things to