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Facebook stock falls as employee shares are freed up for trading

October 31, 2012|By Salvador Rodriguez
  • Facebook sign at the Brooklyn Beta conference in New York.
Facebook sign at the Brooklyn Beta conference in New York. (Mark Ovaska/Bloomberg )

Facebook got off to a poor start Wednesday, the first day of trading since restrictions on 229 million shares were lifted.

Concern that a vast number of employees would sell their shares caused the stock to fall as much as 5% early Wednesday, but the price appears to have begun to bounce back, now hovering at around $21.35, a drop of less than 3%.

The shares were restricted to prevent current and former Facebook employees from pumping more shares into the market at the time of Facebook's initial public offering in May.

The share lockup lifted on Oct. 29, but the super storm Sandy has kept the market closed for a few days.

Restrictions on more shares will expire before the year ends.

Facebook, which has had a rough going since turning public, saw its stock receive a boost last week after reporting its third-quarter results. Sales beat analysts' expectations and the company saw its growth match the second quarter's, ending a trend that slowed sales.

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