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August 17, 2012 at 03:32 PM
Facebook Inc.’s IPO woes continued Thursday, as it stock price hit a new low. An imposed ‘lockup’ deadline expired, allowing early investors to sell their shares, which caused the stock to tumble to just 50% of its IPO price.
The steep drop caused founder Mark Zuckerberg and other senior executives to acknowledge the problem and attempt to pump up morale.
According to The Wall Street Journal, Zuckerberg “has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be ‘painful’ to watch as investors continue to retreat from Facebook’s stock.”
More distressing to employees is the fact that while early investors can sell, employees who own Facebook shares cannot. As the paper notes, lockup expirations in October, November and December will allow Zuckerberg and other employees to sell more than 1.4 billion shares. The biggest lockup expiration, freeing more than one billion shares, is set for Nov. 14. The last lockup expires next May.
The paper further reports that some of the mutual funds that invested in Facebook before its IPO are now underwater or showing paper losses. They include mutual-fund giant T. Rowe Price, which bought into Facebook in early 2011 for roughly $25 a share, according to regulatory filings.
