Facebook stock hits new low
by Barbara Ortutay, Associated Press Writer and Michael Liedtke, AP Technology Writer
August 17, 2012 12:00 AM | 462 views | 0 0 comments | 3 3 recommendations | email to a friend | print
Television correspondent Sabrina Quagliozzi reports from inside the Nasdaq MarketSite in New York’s Times Square in May. Facebook’s stock plunged to a new low Thursday after the expiration of a ban that had prevented some early investors and insiders from dumping millions of additional shares they own in the social-networking leader.
Television correspondent Sabrina Quagliozzi reports from inside the Nasdaq MarketSite in New York’s Times Square in May. Facebook’s stock plunged to a new low Thursday after the expiration of a ban that had prevented some early investors and insiders from dumping millions of additional shares they own in the social-networking leader.
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SAN FRANCISCO — 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.

Analysts interpreted the unusually high trading volume as a clear sign that at least a few of the insiders were seizing on a fresh selling opportunity. That is stirring a debate over whether they’re simply locking in long-awaited gains on investments made many years ago or bailing out of a company that has lost its luster.

A breakdown on just how many major Facebook Inc. shareholders sold their stock probably won’t be available until next week at the earliest. Securities regulations give them at least three days before they have to disclose such transactions.

The information is important “because if you are an investor who has been sitting on the sidelines waiting for a good time to buy the stock, you might decide to stay on the sidelines for a little longer after seeing which insiders decided to sell their stock,” CapStone Investments analyst Rory Maher said.

All told, investors who owned a combined 271 million Facebook shares could have sold their holdings Thursday with the expiration of a ban known as a lock-up period. The restrictions were imposed on a group of venture capitalists, companies and Silicon Valley cognoscente who invested in Facebook during its formative years and sold some of their holdings three months ago when the company went public at $38.

The highly anticipated IPO had valued the company at $104 billion, similar to those of Amazon.com Inc. and PepsiCo Inc.

The shares have plunged by nearly 50 percent since then amid concerns about whether Facebook is destined to become a passing fancy and worries about whether it will be able to sell more advertising on mobile devices as users gravitate there.

Facebook’ stock traded as low as $19.69 before bouncing back slightly. The shares closed Thursday at $19.87, down $1.33, or more than 6 percent. The previous low during the day was $19.82 and the previous low for a close was $20.04, both reached Aug. 2.

More than 156 million shares were traded, more than five times the stock’s average volume over the past month. Trading in the overall market was lighter than usual.

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