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Facebook Stock Drops Below $20 Per Share – Major Investors Bailing?

Facebook initial investors now eligible to sell stock
(Photo by Justin Sullivan/Getty Images)

Facebook has turned out to be not the investment business leaders once thought.Shortly after what is called the “lock-up” period for Facebook ended, numerous investors were suspected of selling, or planning to sell, their stock. The lock-up period is a time frame in which an investor must keep, or hold onto, an investment or stock.

The investors who were eligible to participate in stock sales of Facebook as of Thursday were those investors and directors who were part of the IPO, or Initial Public Offering. From day one, Facebook has been plagued with numerous technical glitches on the exchange that affected sales of stock, and now many investors are concerned about the social network’s ability to continue to grow revenues and profits through ads.

Some businesses are questioning the effectiveness of Facebook-based advertising, while others question the actual amount of valid accounts or members.  A recent required quarterly report issued by the social network   (mandantory for publicly traded companies) showed as many as 8.7 percent of it’s memberships were fake or fraudulent.   While that percentage is rather now,  it did amount to millions of accounts.    Advertisers want hard, factual numbers of  actual “humans” who are members of Facebook, as well as demographic statistics so they know where and how to target their advertising.

 

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