Facebook stock slumps
as new shares hit market
• First lockup period ends.
Falling from a debut of $42.05 on Nasdaq, Facebook stock hit a new low of $19.76 per share as the first lockup period ended on Thursday (Aug. 16).
The end of the initial lockup allowed some early investors and a few insiders to sell their shares. The Wall Street Journal estimated that 271 million additional shares could now be sold. The staggered lockup periods prevent shareholders from dumping their shares into the market simultaneously right after an initial public offering (IPO). A second round of sales for Facebook is expected in November, according to CNN.
It's been a rough ride for the social networking company since its May 18 IPO. Excitement faded within days as the stock price fell and individual investors filed class action lawsuits against the social networking company. Two were filed in San Mateo County Superior Court; the lawsuits allege that prior to the stock offering, the lead underwriters such as Morgan Stanley told a handful of select investors, but not the public, about decreased revenue projections.
Despite the lowered expectations, the "Facebook effect" on real estate may be alive and well. The company's new home county topped the list of least affordable housing in the state in the second quarter of this year, according to the California Association of Realtors. San Mateo County edged out San Francisco County. The association's data shows that only 23 percent of San Mateo County households can afford to buy a median-priced home in the county, which runs about $825,000 this year — up from $735,000 last year.