(Reuters) – Facebook Inc shares fell 4 percent in busy trade early on Wednesday as the company allowed employees to start selling some stock.
The world’s largest social network waived a provision that prevented employees from selling shares until November 14. As a result, Facebook staffers were able to sell their vested shares on Monday. [ID:nL2E8K4E8Y] About 234 million shares held by employees were eligible for sale in the public market.
However, because the markets were closed on Monday and Tuesday in the wake of powerful storm Sandy, Wednesday was the first trading day.
“I don’t really understand why Facebook (chose) to unlock virtually all of its compensation within the year of its IPO, but they did,” said Michael Pachter, an analyst with Wedbush Securities.
“They made a mistake and set the company up for volatility.”
More than 1 billion Facebook shares held by employees, insiders and early investors are set to become available for trading by year’s end.
Facebook suffered a painful public debut earlier this year, as investors worried about the company’s ability to keep up revenue growth and the large pool of additional shares in the lock-up that are now hitting the market.
Wall Street also has cast a gimlet eye on Facebook and its ability to attract mobile revenue as more people turn to smartphones and tablet devices to access the Web.
Last week, Facebook said it increased mobile advertising revenue at a faster than expected pace, totaling $ 150 million in the third quarter. Estimates had pegged mobile revenue at $ 40 million to $ 50 million in the second quarter.
Shares of Facebook are down more than 40 percent since the IPO. The stock was down 3.8 percent at $ 21.11 on Wednesday morning, off an earlier low at $ 20.73.
(Reporting By Jennifer Saba; editing by Gerald E. McCormick, Claudia Parsons and Matthew Lewis)
Social Media News Headlines – Yahoo! News
Facebook shares fall as lock-up period expires
This article
Facebook shares fall as lock-up period expires
can be opened in url
http://freshnewster.blogspot.com/2012/10/facebook-shares-fall-as-lock-up-period.html
Facebook shares fall as lock-up period expires
