Facebook shares fell to the lowest intraday price in three weeks on concern that shareholders will start selling their shares when a prohibition on the transaction expires.
The stock declined as much as 1.8 percent to $18.87, the lowest since Oct. 19, before closing at $19.86, down 1 percent. Restrictions on the potential sale of 804 million shares lift on Nov. 14, followed by another 156 million on Dec. 14.
Facebook has lost about half its value since selling shares at $38 apiece in a May initial public offering.
Current and former Facebook employees who have seen the value of equity compensation plunge can sell as lockups designed to prevent a flood of shares hitting the market immediately after the IPO expire.
The company showed in its most recent earnings report that it’s making headway generating revenue from mobile advertisements, keeping the stock from dropping more steeply.
“Buckling of the stock would occur because of lots of selling at the same time,” said Brian Wieser, an analyst at Pivotal Research Group.
“It seems like there’s enough demand to absorb this. Investors would have been a lot more nervous if third quarter numbers hadn’t come out well.”