Why does Facebook share price hit all time low very soon?
Common on Facebook
The word Facebook is very popular globally in many countries in all age category.Facebook is very commonly used a platform to reconnect and get socialize with all in this Internet world. Now a days recognition among the people is being rated in the parameters of Facebook likes and their views,share,timeline tag and many others.Facebook becomes a giant and changed the Internet world into a Ultra Modern by giving their users a Free account which it still exists.
About Facebook Earlier days
Mark Zuckerberg is the Chief Executive Officer and Chairman of Facebook Inc. Facebook was started at 2004 initially with his few friends and they decided to do this as as full time job. The idea of Facebook came from his school,college which to know about the friends detail and all complete information with their photo.Later on with the same programmer Facebook has been given shape and full fledged it comes popular above 2007 and rapidly after 2010. Mark is the top 100th richest person in the world after 2010 and he continues. Many new application has been launched continuously after 2009. Facebook added 500million users in 2010 itself and we need think to guess now? Now 85% of American people have Facebook account and they are major revenue earning for him.
Facebook listed publicly after long time
Mark has released FB IPO on May 18, 2012 and its expected by all corporates and majority of the people and its oversubscribed. In 2004 Google IPO is the ever high IPO collection and its now four time larger than Google. FB collected $16 billion and which is the top performer still now and it very hard do beat in current financial scenario. The release price was $38 and its the second largest IPO for US. On May 29, 2012 stock falls below IPO price and touches $30 due to many reasons.
Why does now Facebook share price drops rapidly?
Facebook share price drops suddenly due to several reasons. Without Insider trading and Insider traders know market in the world lives. Like the same Facebook stock price also slashed due to Insider trading but it is no the only reason to specify. Major reason is Lock up period gets starts and traders starts selling in massive and so it goes below IPO listed price.
What is Lock up period?
This term is common in equities market specially for newly listed share price.IPO lock-ups typically last anywhere from 90 to 180 days after the first day of trading, and are in place to prevent shareholders with a large proportion of ownership from flooding the market with shares during the initial trading period.
The expiration of a lock-up period for insiders increased the pool of available shares by 60% and had worried analysts that it might lead to more falls in Facebook’s already battered share price. Their fears proved well founded in early trading as Facebook’s share price 7% to $19.83, their lowest level since the $38 IPO price set in May. They ended the day at $19.88, just over 47% below the IPO price.Trading volume on Thursday tripled Wednesday’s level to 156.7 million shares – an indication that new shares were being sold rather than existing shares traded.If Facebook’s stock prices continue to down, analysts will be pressured to change their buying and selling procedures, with the social network.