Facebook COO Sheryl Sandberg and Chief Accounting Officer David Spillane sold 353,000 and 256,000 shares respectively soon after the insider lock up period for employees ended last week spurring a fresh wave of selling of the high profile stock.
The first lockup on Facebook stock expired on August 16, freeing up 271.1 million shares held by early investors including DST Global Ltd., Goldman Sachs Group Inc., Elevation Partners and Accel Partners, the people behind of the Facebook valuation .
The crafty Wall Street Bank Goldman Sachs and their close confidants who were behind raising the valuation of Facebook from $6 billion to $100 billion in a period of just over 2 years ( see our previous reports in ISEdb ) made the maximum profits from the IPO while most others lost out. As of September 30 at the end of the second lock up period 692 million FB shares were available for public trading.
On 29th October another 230 million shares became freely available for sale. Facebook staffers were also permitted to pre maturely sell out their personal holdings before the avalanche of 777 million free stocks hits the market on 14th November. The lockup will expire for an additional 960 million shares by the end of the year, followed by 47.3 million more in May 2013. Facebook CEO Zuckerberg’s holdings of 444 million shares and options for 60 million more shall not be available for trading before September 2013, according to the filing with the SEC.
The Facebook share sank to 20.73 early this week as the new stocks became available for selling after markets reopened following the disruption due to hurricane Sandy that had stopped trading at NYSE for 3 days. The share is expected to sink further as the number of shares available for sale doubles after mid November.
Whereas lock in periods ensured that the FB share did not plummet immediately after the IPO, it has dropped by 40% nonetheless and has remained hovering around $20 and faces its first big test as the biggest chunk of 777 million shares complete their lock in period. Underwriting Banks led by lead underwriter Morgan Stanley have already spent $66 million supporting the share price and is set to loose more money as the FB share continues in its downward journey.