Facebook Inc.’s (NASDAQ: FB) shares have traded below $20, after a $38 initial public offering. The price could be pushed down more by the people who helped start the company — both employees and venture capitalists.
The lock-up period during which these parties are not allowed to sell shares is nearly over. On August 16, 271 million shares will be eligible for sale. The fortunes of the world’s largest social network company are so poor that it would not be unusual for many of these holders to hit the exits, to make whatever money they can on “cheap” shares they got in early rounds of financing, which valued the company at well below its current level.
Douglas A. McIntyre