Facebook Inc. stock fell to a record low after freeing up an additional 271.1 million shares Thursday, boosting by 60 percent the number available to trade and compounding concerns that have depressed the stock since the initial public offering.
Facebook shares declined 6.3 percent to $19.87. The shares haven't closed above the $38 IPO price since the first day of trading.
The prospect of more stock sales means Facebook will need to work even harder to convince investors that it deserves a higher price, relative to earnings, than all of its U.S.-based competitors, except for LinkedIn Corp. The shares freed up Thursday make up 14 percent of the 1.91 billion that will be available for sales in the coming nine months.
"Buckle your seat belts for the next couple of months until they make it through all these shares coming unlocked," said Tom Forte, an analyst at Telsey Advisory Group in New York.
Early Facebook investors such as DST Global Ltd., Goldman Sachs Group, Elevation Partners and Accel Partners could start selling part of their holdings Thursday, Menlo Park, Calif.-based Facebook has said in filings. That's after the lifting of restrictions, set with underwriters, that are designed to prevent a flood of shares immediately after an IPO.
The shares subject to Thursday's lockup expiration are worth about $5.39 billion, based on Thursday's closing price, and represent almost six times the average daily trading volume in Facebook stock.
Thursday's trading volume ? 156.8 million shares ? was the third-highest since the IPO.
The restriction is being lifted for early investors, excluding Facebook chief executive Mark Zuckerberg, who sold part of their holdings in the IPO. Facebook spokeswoman Ashley Zandy declined to comment.
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