SOCIAL NETWORKING OUTFIT Facebook has seen its stock price rise sharply today despite this being the day its employees are finally allowed to sell 800 million shares.
Facebook's botched initial public offering (IPO) saw the company's market value drop from a fanciful $100bn to less than half that in a matter of months. With the firm's employees allowed to sell 800 million shares there were fears that the stock would tank, however the price jumped by 10 percent after the market opened as fears of a mass selloff dissipated.
With Facebook's share price falling like it had lead weights attached to it, the release of 800 million shares held by employees was seen as a pivotal moment in judging the firm's future. However it seems that the market had already accounted for employees hitting the sell button and as fears of a massive selloff eased the stock price rose by over 10 percent to its highest level since 26 October.
Facebook's financial report released on 23 October provided the biggest boost to its share price, however it also showed that the firm recorded a $59m loss for its 2012 third quarter. The firm also reported sinking operating margins despite claiming over a billion users, 58 percent of which were classified as "daily active users".
While institutional investors might have overreacted to fears of mass selling by employees, it is likely that given Facebook's already low share price those holding shares might be hanging on to them in the hope of making slightly more cash.
Those investors that have large stakes in Facebook might be breathing a little more easily today after seeing that the firm's rank and file haven't wanted to take an early exit from the stock.
At press time Facebook shares were trading at $21.53, an increase of just under 8.5 percent from the previous day's closing price. µ
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