Facebook stock hasn’t been the major performer that many expected when the company went public in May, and some on Wall Street speculate that it could take a big hit on Thursday.
Why is that? Thursday is the first day that the company’s early investors and some of its directors will be able to sell stock they own in the social network. The company went public with 421 million shares as part of its original offering, and 271 million shares will be unlocked Thursday.
But, as Reuters reported, Facebook’s less-than-stellar market performance may actually help the company with this problem. The only investors who will want to sell will be those looking to make some money — and there’s far less money in selling as the stock continues to drop from its $38 debut price.
More shares are due to be unlocked in the coming months, CNN Money noted, with 1.8 billion shares due to hit the market within the next year. Facebook’s tiered system means that employees who’ve received shares as compensation will also have them unlocked in the fall.
Analysts have downplayed the potential impact the shares could have on Facebook.
As Wedbush analyst Michael Pachter told the Associated Press, it would only look bad if high-level officials within the company sold their shares.
“The only people who would sell are people who need the money,” Pachter told the AP. “I would be very worried if [COO] Sheryl Sandberg or [CFO David] Ebersman sell, but they are not that dumb.”
Facebook closed up around 4 percent Wednesday at a price of $21.20, though it was trading slightly down after hours.
(Post Co. Chairman and chief executive Donald E. Graham is a member of Facebook’s board of directors.)
A Facebook court battle: Is ‘liking’ something protected free speech?
FTC finalizes Facebook settlement
AP: Facebook launches new email address for people to report phishing scams