Facebook Inc (NASDAQ:FB) shares were up yesterday and soared 12.60% to $22.36 despite the fact that The company is presently going through its biggest stock-lockup expiration with 773 tmillion Facebook shares owned by employees now open for trading in the open market. Notably, 504 million shares owned by Mark Zuckerberg are eligible too. However, he has announced that he would not be selling his shares.
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The stock was predicted to take a minor hit after experiencing the largest lockup expiration. However, the market had estimated the hit with a few days of downturn. At the same time, shareholders are not placing bets on another price drop through short selling, an effective way of getting pocket money when shares shoot down.
Short-term profit that is based on a prospective new share price drop is gradually disappearing since short-selling transactions died off sometime during October. It is good news for the long-term stock price of the company because it attracts committed shareholders. The fact that share price is a little up could be indicative of the worst being a bygone.
CEO and founder of Facebook, Mark Zuckerberg has taken another measure to dampen the recent lockup expiration. He has declared that he has no plans of selling his shares before next year. He owns 444 million shares and 60 million stock options. More than a stock strategy, it is an indication of his confidence in his foundation.
Every lockup expiration bears a different story. Shares had shot up on 24th October by more than 22%. However, the first employee lockup expiration had resulted in a smaller 5% hit, which was followed by a slump for Facebook users for a few days.
Having crossed the recent milestone, the worst days for Facebook stock price is over. The company should be able to expect more conventional price fluctuations.