Share prices for Facebook have dropped another five per cent in the wake of the employee lockout coming to an end. This saw them drop to $20.94, far below its original offering price of $38 per share.
Until now, only executives and investors were allowed to sell off their shares in the social network, but this week – after the NASDAQ was reopened in the wake of hurricane Sandy – certain employees were able to sell off theirs. However not all of them were able to, with the others expected to offer theirs up next month. This will signify the end of the biggest lockup, with some 777 million shares becoming available for trading. While it's likely that not all of them will be offered, a large portion of them surely will.
Despite this drop to just over $20, this isn't the lowest the stock has fallen. After the first lockup of investors and executives was ended back in August, the stock fell to its lowest level at $19.69, according to TechCrunch. Since then it has recovered somewhat, hitting $21.94 before this latest drop.
To help solidify the stock, Mark Zuckerberg has announced that he doesn't plan to offload any of his 444 million shares over the next year. Of course sceptics would suggest that he did this as a matter of survival. If he had gone ahead and sold even a portion of his stock at such low levels, it could indicate to the rest of the stock holders that the bottom had well and truly dropped out of Facebook.
KitGuru Says: Despite the low value the stock has fallen too, who wouldn't still love to have a few thousand shares in their back pocket?