Yesterday, was the day when some of its investors for the first time since the stock market introduction 18th May had the chance to sell their shares, which three months ago was about 40 dollars value.
Yesterday, it was around 19.87 – the lowest so far.
As many companies do when they first sent out to public tender, included Facebook’s debut a ‘lock-up’ agreement, which requires that some shareholders must hold their shares for a specified period – usually 90 to 180 days.
Lock-ups to prevent the market from being flooded with too many of the Company’s shares immediately and thus, by keeping the numbers down, raise the value.
But when a company’s fixed shares are released, the shares will typically fall when millions of new shares are coming in at once.
Thursday was just the first day, the frozen shares expired on Facebook – several more will come and a total of 1.8 billion shares may hit the market in the next few months.
Founder Mark Zuckerberg denied that there were problems and asked his employees not to be influenced by stock prices, but at a company meeting earlier this month, he acknowledged according to the Wall Street Journal that it can be “painful” for employees to see investors continue to sell out of Facebook shares.
“I take a short-term loss now,” said an employee who owns Facebook shares, now worth less than when he got them.
Overall, Facebook pulled 1.18 billion dollars home to the company. But it was not enough to make the stock exchange traders happy.
A single, anonymous analyst said to the website Business Insider that Facebook’s revenue is “meh” – an expression of shrug-inducing mediocrity. At the same time Facebook announced that it has become more expensive to operate and work in the Facebook organization, and that the increased revenue from ads does not yield any increase to the bottom line.
Perhaps that’s why Wall Street is not winning Facebook to having surprised positively. Facebook’s shares plummeted 9 percent after the accounting presentation and for the first time a smoke Facebook share below 25 dollars.
But there is good news for Facebook and so to the people who bought shares in the company. The amount of monthly active users increased and Facebook pulled 29 percent more people into the network than last year.
In total there are now 955 million active Facebook users, of which 543 million are primarily on Facebook from a tablet or a smartphone. It is possible that you are starting to feel somewhat Facebook metal fatigue, but apparently not in the rest of the world.
Kurt Lykke Lindved Culture and Development, UN