Business

Lockup ‘Likes’

Facebook is full of surprises.

The social media stock was widely expect to slump yesterday as the biggest lockup on more than 800 million shares was lifted allowing insiders to start selling in droves.

Instead, on a day when most blue-chip stocks were trading in negative territory, Facebook beat the odds with one of its best showings since its initial public offering. Shares jumped 13 percent, or $2.50, to $22.36.

What’s more, a number of analysts believe the worst is over. With no more major lockups looming, they’re advising investors to start building positions.

Still, many on Wall Street were left scratching their heads. The stock never seems to follow the script, starting from its first trading day in May when it declined from its $38 offering price.

“The market still doesn’t understand this company,” said Brian Wieser, an analyst with Pivotal Research Group.

But it looks like employees understand that it is a real business, he said, which is why many of the insiders free to sell are waiting for a better price.

The social media giant took a big stride last month convincing investors that it is a viable business, announcing third-quarter results that beat expectations.

The stock surged 25 percent after its earnings report on Oct. 23. Since then, though, concerns over the lock-up expiration weighed on the stock, with insider sales by Chief Operating Officer Sheryl Sandberg only heightening the anxiety.

“Fear was the motivator preventing people form investing ahead of this lock-up,” Wieser said. “Fear is now the motivator that causes people to come in.” Nobody wants to miss a potential rebound, he said.

The firm also chose to announce two developments, which may have contributed to the upswing. Facebook announced a new job recruiting service that could encroach on Link-edIn’s turf, and said it was testing a long-awaited share button for mobile users, similar to the retweet function on Twitter.