17 Aug 2012

Facebook shares down further

9:36 am on 17 August 2012

Facebook shares fell heavily on Thursday when early investors in the social network company were allowed to sell their shares for the first time.

The stock has almost halved in value since the company floated on the New York Stock Exchange at $US38 per share in May and are now another 6% lower.

The lock up applied to early investors, like Goldman Sachs and Microsoft, which bought into Facebook before it became a public company.

Although Facebook has nearly one billion users, the company is struggling to make money out of them.

Lock-ups prevent insiders from selling their shares in a newly-floated firm, and usually start to expire 90 days after the initial public offering.

They are designed to prevent the share price from fluctuating wildly if too many investors decide to sell their shares all at once.

Facebook reported a loss of $US157 million in the second quarter.