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Facebook stock down after lockup expires

A sign welcoming Facebook on a screen outside

A sign welcoming Facebook on a screen outside the NASDAQ stock exchange in Manhattan. (May 18, 2012) Photo Credit: AFP/Getty Images

Facebook's stock price fell Wednesday, the day employees were eligible to start selling restricted stock in the company.

A lockup period that had prevented such sales expired Monday. U.S. markets reopened Wednesday after superstorm Sandy.

In all, 234 million additional shares and stock options held by employees as of Oct. 15 became eligible to flood the market. CEO Mark Zuckerberg has said he won't be selling stock until at least next September.

Lockups, common after initial public offerings, are designed to prevent a stock from experiencing the kind of volatility that might occur if too many shareholders decide to sell at once.

Facebook's stock hasn't done well since its IPO in May amid concerns about its ability to keep growing revenue. But it saw its biggest one-day gain last Wednesday after posting strong third-quarter results and detailing for the first time how much money it makes from mobile ads. Mobile ads had been a concern since before the Menlo Park., Calif., company's IPO.

The next lockup expires Nov. 14; 777 million shares and stock options will become eligible to be sold.

Facebook Inc.'s stock fell 3.79 percent, to $21.11 Wednesday. The stock is down 44 percent from its IPO price of $38.


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