The prices of the stock of Facebook declined by more than 4% as the employees of the company started to sell the stocks of the company.
The Facebook’s stock closed on Thursday to as low as $20.73 per share. The price declined after employees and shareholders were relaxed to trade more than 230 million shares of additional Facebook stock.
This happened after first of three big lockup periods expired on Monday. This thing provided the opportunity to the employees of the company to sell off their share for the first time. This happened for the first time since the company became public in May.
The stock markets were closed on Monday and Tuesday due to the super storm Sandy. The employees waited till Wednesday and when markets opened on Wednesday and Thursday, the employees of the company started to off loading their shares. This brought down the prices of the stock of the company.
Since the launch of its IPO, the stock of the company faced many problems. Since its IPO, the prices of the stock of the company did not go up. The investors and the employees of the company spent few months in watching the movement in the prices of the shares of the company but this stock disappointed them a lot. During past few months, at one point, the prices were gone down about half of the price of its IPO value.
The price of the stock of the regained momentum in early September and it crossed the level of $20 but after then the prices remained below the level of $20. During the beginning of this month, the average Facebook employees have seen the decline in the value of their Facebook stock by more than $2 million.
The analyst of the market were considering both the options on Wednesday and Thursday that whether employees of the company would sell their shares during the first chance or they will prefer to hold their stock with positive outlook for the future. But the declining prices of the stock of the company have clearly indicated that most of the employees of the company have selected the option of selling the stocks. The USA Today showed in its report that trading volume of 62 million shares shows that the selling pressure is more in the stocks of the company.
According to some leading analysts of the market, this could be dangerous sign for the other investors as they may rise the question that if the employees of the company are losing their confidence on the company, then what should other investors follow. A similar situation was also witnessed during early August, when Peter Thiel, who is one of the first investors in Facebook, sold majority of the stock holding out of his about 22 million shares holdings. This thing also contributed a lot in the decline of the price of the stock of the company.
On the other hand, it is also expected that company will introduce more than 900 million additional shares of Facebook during the next month. The analysts are not giving favorable opinion for the stock of the company.
Tags: Declining trend, prices of the stocks, Shares of Facebook