Instead of shares of Facebook falling in value – after employees were permitted to sell some of their stock on Wednesday – the price of shares jumped in early morning trading.
Analysts had warned the stock could drop in price after 777 million shares belonging to employees and some early investors were unlocked, and could be sold.
Media reports said the stock edged up more than 10 percent to $21.85 – in the first half-hour of trading on Wednesday. It was selling for $21.55 by mid-morning.
Image via Shutterstock
USA Today reported a similar pattern happened in August when Yelp jumped more than 20 percent because fewer shares were being sold after a lockup was ended.
Earlier this year, shares of Facebook dropped after the company unlocked shares twice. In August, company shares fell six percent to a record low, and in October they fell three percent.
"While the lock-up is expiring, there is nothing requiring anybody to sell," Tim Ghriskey, chief investment officer at Solaris Group, told Reuters. "Given the low price, these long-term holders are deciding to hold the stock and that is lifting it here as the fear of the expiration subsides."
Additional shares will be allowed to go on sale in coming months. On Dec. 14, 156 million shares held by early investors and some others could be sold. Then on May 18, 2013 some 47 million shares held by Mail.ru Group and DST Global, who were early investors, could be sold.
The sales come after Facebook’s problem-plagued initial public offering in May. The stock has been a disappointment to some investors, TechZone360 reported.
Also, the company was trying to find a way this year to take advantage of the increasing use of mobile devices by consumers.
In August, TechZone360 reported that some of the causes of the falling stock price were an earnings report (which showed costs increasing more than projected) and lingering questions about future company growth. A few key executives left the company, as well. Also, Facebook reported this year that more than 83 million Facebook accounts were duplicates or fakes.
Silver was the primary mineral mined in Nevada when it was admitted to the union in 1864, earning it the slogan of "The Silver State." Times changed, …
Big telecom mergers just don't fly these days, but it took Comcast 14 months and at least $237 million spent in 2014 to figure it out it couldn't buy …
The need to be connected to the 'smarter world' is ever increasing with the rise in the number of mobile devices. LTE is now a global reality for mill…
Get your next-gen stats here! Major League Baseball Advanced Media (MBLAM) this week launched "next-generation" stats league-wide that it hopes will c…
If you give your house key to your neighbor, he has the opportunity to snoop around through your vinyl album collection. That has lessons for enterpri…