The following is an excerpt from Barbara Ortutay and Michael Liedtke | Associated Press | August 6, 2012 | Yahoo.com |
SAN FRANCISCO (AP) — 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.
Firms ranging from Accel Partners to Goldman Sachs, Zynga CEO Mark Pincus and Facebook board members James Breyer, Peter Thiel and Reid Hoffman were among those free to sell stock they own, after the lifting of a ban known as a lock-up period.
If many of them took advantage of that, Facebook’s stock could decline because the market would be flooded with nearly two-thirds more shares.
It’s not yet known whether any of those investors had sold any stock because they have three business days to disclose any sales, said Sam Hamadeh, the CEO of PrivCo, which researches privately held companies.
But many of them likely did, he said.
“A lot of people have been waiting,” Hamadeh said. “Facebook was expected to go public a long time ago.”
Venture capitalists who invested in Facebook as early as 2005 were likely itching to sell at the earliest opportunity. Though it’s trading at about half of its IPO price, Hamadeh said Facebook’s stock is still very expensive.
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