Yesterday Facebook finished the day down 3.49 percent with the stocks in the social media company falling by 83 cents.
The troubles with Facebook seem to be going from bad to worse with the price of the shares in the company now down by a massive 44 percent from its IPO of 38 US dollars.
Yesterday (October 31) was the first day that employees of Facebook were allowed to sell any of their stocks.
Employees in the company hold more than 230 million of the company shares and yesterday was the first time that they were able to sell what they had after a lock up period expired.
A delay to the sales of the stocks had come because of the effects of Hurricane Sandy but when the New York Stock exchange reopened the Facebook employees were able to sell what they liked of their shares which led to a glut of shares in Facebook coming onto the market and then resulted in the fall in the overall share prices.
The is one person at Facebook who wasn’t selling their shares yesterday. CEO of Facebook, Mark Zuckerberg, said that he won´t be selling any of his shares until at least September 2013.
The lockup of the shares was put in place to allow the Facebook shares to be prevented from having massive fluctuations in share prices if lots of people choose to sell at the same time.
The end of the next lock up period will come in on November 14 when a further 777 million shares in Facebook will become eligible to be sold on the market. Those at Facebook will be hoping that a similar rush to sell stocks will not occur at the end of the next lock up period or the value of the shares could potentially fall even further.
It hasn’t been all bad news though for Facebook recently. Last week the company saw the largest one day gain on stock prices following the posting of very strong third quarter results from the company.
Facebook have also seen confidence grow from investors as for the first time the company revealed how much money it makes from advertising on mobile devices.
The capability of Facebook to be able to gain revenue from users on mobile devices is seen as key to the success in growth of the company in the future with an increasing number of users accessing Facebook through mobile devices and accounting for an important sector of the market.