Facebook stock has been dropping faster than Chad Johnson’s football career. The company’s shares took another painful decline this week as the ban on selling was lifted on early investors in the company. The shares are now about 50% of what they were when the company first went public, leading to mass panic among those who were once fighting to get in on the ground floor of the company.
Even Facebook Chief Executive Mark Zuckerberg is acknowledging that the steep decline is hurting his employees. He once basically laughed it off, but now he has to take the matter more seriously. The stock is trading around $19 per share after starting off at $38.23 in the Initial Public Offering.
Zuckerberg once told his employees to ignore the stock price and simply focus on creating a great company. But this week, he admitted that watching the price drop has been “painful,” as he himself has lost hundreds of millions of dollars a result of the price decline. The meeting was to improve moral, but we’re not sure if it worked.
Early investors were allowed to cash out this week, but not company employees. The shares hit a new low as a result, closing at $19.87 after 271 million shares (13% of the offering) were dumped into the market.
The sales came after the rule for early selling was lifted. Investors are not typically allowed to dump shares right after an IPO. In October, November and December, Facebook employees will be allowed to sell. We’re sure that they can’t wait for that time to get here.