Facebook shares plummet nearly 4 percent as the company’s OWN employees dump stock
- The stock fell 83 cents to close at $21.11
- The company fell 3.79 percent after trading 99 million shares
- CEO Mark Zuckerberg says he won’t sell his shares until September
Facebook’s market value was attacked by its own employees on Wednesday when they dumped millions of shares they owned in the company.
The social networking giant ended the day with a loss of 3.79 percent after 99 million shares changed hands.
Shares of the company fell 83 cents to close at $21.11 on Wednesday. The stock is down 44 percent from its $38 IPO price.
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Facebook CEO Mark Zuckerberg says he will not sell his shares this year
Wednesday marked the first time employees, who own 234 million shares, were able to sell their Facebook shares.
A lock-up period ended on Monday, requiring them to hold on to their shares after the company’s IPO.
However, the markets were closed on Monday and Tuesday due to super storm Sandy, forcing workers to wait until Wednesday.
On average, 50 million shares of Facebook are traded every day. Trading volume skyrocketed to more than 9 billion on Wednesday.
The company’s IPO in May was valued at $38 per share. The price was $21.11 at close of trading on Monday.
Nasdaq chart shows Facebook shares ended the day at just over $21
CEO Mark Zuckerberg is not selling. He’s already said he won’t be selling shares until at least September.
In total, as of October 15, 234 million additional shares and stock options held by employees were eligible to flood the market.
Lockups often occur after the initial public offering of shares and are designed to prevent a stock from experiencing the kind of volatility that can occur if too many shareholders decide to sell all at once.
Facebook posted its biggest one-day gain last Wednesday after posting strong third-quarter results.
The day before, Facebook reported for the first time how much money it makes from mobile ads. Mobile has been a concern since the company’s Menlo Park, California, public offering.
Shares of Facebook have not done well since going public in May amid concerns about its ability to grow revenue. But the next lockup expires on November 14, when 777 million shares and stock options are eligible for sale.