The number of outstanding shares of social media giant Facebook
) increased 60 percent on Thursday, as the company's first major
lockup period expired.
Since Facebook's IPO, analysts have become increasingly
concerned by the company's poor showing.
Over the next nine months, around 1.91 billion shares will be
freed up for trading, compared to the current 500 million that are
freely traded. The looming expiration of lockups is a major concern
for investors. They are worried that the price of the stock could
fall even further on heavy selling from early investors that have
been prohibited from selling Facebook stock since the company's May
17 Initial Public Offering (IPO).
Analyst Herman Leung at Susquehanna International Group told
Bloomberg, "It's one of the No. 1 issues on investors' minds right
now. Even the investors that I talk to who want to buy the stock
and like the company are not sure if they can stomach the
) Chief Executive Officer Reed Hastings revealed plans to invest $1
million in Facebook. According to an SEC filing, Hastings acquired
47,846 shares at a price of $21.03 each, costing the Netflix CEO
just over $1 million.
Hastings' investment gave Facebook a minor boost on Friday.
Facebook shares traded up more than two percent Monday morning, as
investors continue to buy into the social networking giant.
While the company has had a number of problems since its IPO,
allegations of click fraud
, Facebook continues to be one of the strongest tech companies in
Still, Facebook investors like DST Global, Goldman Sachs,
Elevation Partners and Accel Partners got the go-ahead to start
selling holdings on Thursday. According to
, those sales could mean that Facebook has to work harder to
convince investors that it deserves a higher valuation.
The shares that have been freed up are worth roughly $5.75
billion based on Wednesday's closing price.
On Thursday, Facebook traded at about $21.20, up roughly 4
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