FB Lockup Expiration: Nothing to Fear?
Facebook (NASDAQ:FB) investors have learned from the social network’s last lock-up expiration that major stock releases do not always need to be viewed with fear. Now, with 156 million shares set to be released from lock-up on December 14, investors’ concerns appear to have diminished since November, according to Forbes.
Facebook’s Lock-Up Expiration History
Ahead of Facebook’s November 804-million-share expiration, which was the largest number of shares to be released since the company went public in May, investors believed that the company’s stock would become further depressed with the increased number of shares available for trading. At that time, Facebook’s stock was trading at roughly half of its initial offering price of $38 per share.
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Investors’ fears had a very real basis; when Peter Thiel, an early investor and a Facebook director, sold a large portion of his stake in August’s expiration, shares dropped down towards their all-time low. Furthermore, as Forbes reported, the last-minute increase of Facebook’s initial public offering “ended up contributing to a disappointing IPO.”