Following the expiration of Facebook's lockup agreements rules Thursday, Facebook’s stock price has continued to drop, reaching an all-time low. Many early investors likely dumped some of their shares, significantly expanding the number of shares eligible to be traded, which marks yet another rough patch for Facebook in its first several months as a public company.
Lockup agreements rules, as written by the Security and Exchange Commission, attempt to prevent insider trading by restricting such trades for a certain period, typically 180 days. In Facebook’s case, that limit ended Thursday morning.
Now, an additional 271 million shares—increasing the available volume by 60 percent—have been made available. But, as more of these lockup agreements rules expire in the coming months, even more Facebook shares will become available.
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