Firms ranging from Accel Partners to Goldman Sachs, Zynga CEO Mark Pincus and Facebook board members James Breyer, Peter Thiel and Reid Hoffman were among those free to sell stock they own, after the lifting of a ban known as a lock-up period.
If many of them took advantage of that, Facebook's stock could decline because the market would be flooded with nearly two-thirds more shares.
It's not yet known whether any of those investors had sold any stock because they have three business days to disclose any sales, said Sam Hamadeh, the CEO of PrivCo, which researches privately held companies.
But many of them likely did, he said.
"A lot of people have been waiting," Hamadeh said. "Facebook was expected to go public a long time ago."
Venture capitalists who invested in Facebook as early as 2005 were likely itching to sell at the earliest opportunity. Though it's trading at about half of its IPO price, Hamadeh said Facebook's stock is still very expensive.
"With VCs, they know that waiting for a better price is a fool's game," he said.
Thursday was only the first of several lock-up expiration dates for Facebook's stock. The biggest one is coming in the fall.
Only 271 million shares became eligible for trading Thursday, but by the time all the lockups expire, that'll come to 1.91 billion. That's nearly four times the 421 million shares that had been trading since Facebook began trading publicly 90 days ago.
On Tuesday, shares of online reviews service Angie's List suffered the biggest one-day drop and closed at a new low following the expiration of a similar ban. The price dropped, even though there was no word on whether any of the major investors had dumped their shares.
Facebook Inc.'s stock traded as low as $19.69 before bouncing back to $20.14 in afternoon trading Thursday. That's still 5 percent down, or $1.06, from Wednesday's close and about 47 percent below its initial public offering price of $38. If the stock hits $19, it will have lost half its value since Facebook went public in May.
By 1:30 p.m. EDT, nearly 120 million shares had traded -- nearly four times the average volume on a full day.
It has been a rough run for Facebook. After one of the most-anticipated IPOs in history, Facebook suffered what may be the most-botched public offering as trading glitches marred its first day. It's been almost all downhill for the Menlo Park., Calif., company since then.
Investors have been concerned about Facebook's ability to keep increasing revenue and make money from its growing mobile audience, even as many analysts hold positive long-term views.
Those eligible to sell stock on Thursday were the investors and directors who had participated in the May IPO. The exception was CEO Mark Zuckerberg, who will be ineligible until November. Microsoft Corp., an early Facebook investor, was eligible to sell, though it was unlikely to do so because of partnerships it has with the social network.
Lock-up periods prevent insiders from unloading shares too close to an IPO and can help prevent volatility that might occur if too many shareholders decide to sell a newly traded stock all at once. They generally start to expire 90 days after a stock makes its public debut. Thursday marked 90 days since Facebook's began trading publicly on May 18.
Other shareholders, including many Facebook employees, will be able to sell beginning in October. The last lockup period expires next May, a year after the IPO.
Facebook's stock is likely to be volatile until the end of the year when the majority of the lockups expire. Hamadeh called them a "dark cloud on the horizon."
"There is no way around it. It'll be painful," he said. "But hopefully once that selling pressure is gone, it will find its floor and could be a basis for a more stable stock through 2013."
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