Facebook's stock dived below US$20 overnight as analysts predicted the companies’ eligible insiders capitalised on the lock-down expiry.
Shares in the social networking site hit an all-time low as early investors cashed in during their first chance to sell their stock since the company's initial poor public offering.
Unusually high trading volumes led analysts to suggest at least some insiders were seizing on the fresh selling opportunity.
Key investors such as Accel Partners, Goldman Sachs and leading Facebook board members were eligible for the sales but it is not yet known who has sold any stock with a three business day rule for disclosing any sales.
When the full gamut of shares is released, experts are expecting share price to decline to around $7, in line with present forecasts. Consequences of such market activity could mean investors and large shareholders will sell their holdings as soon as they humanly can.
While the industry was originally not expecting any action on the market, if the $1.91bn shares do flood the exchange it would represent four times the 421m shares currently trading since Facebook’s initial public offering in May.
The combined 271m Facebook shares owned by investors could potentially be sold since the expiration of the ban, after the restrictions were imposed on a group of venture capitalists who invested in Facebook during its formative years, selling some of their holdings three months ago when the company went public at $38.
But as reported by the social networking site in a regulatory filing, CEO and founder Mark Zuckerberg is excluded from selling his shares for unspecific reasons – with the founder eligible from mid-November.