Facebook Inc. (FB:US) shares extended a decline, marking their steepest one-day drop in a week, days before the lifting of a ban on stock sales by some of the company’s biggest investors.
The stock fell (FB:US) 5.5 percent to $20.72 at the close in New York today. They are down 45 percent since being sold at $38 a share in a May 17 initial public offering.
Facebook disappointed investors on July 26 when its first earnings report as a public company showed slower sales growth in the second quarter and Chief Executive Officer Mark Zuckerberg didn’t provide a sales or profit outlook for the year. The lockup on the first block of shares held by insiders expires on Aug. 16.
“You’ll see roughly 70 percent of the shares come off lockup between now and December,” said Victor Anthony, a New York-based analyst at Topeka Capital Markets who rates the stock a buy. “There is going to be pressure over Facebook’s stock over the next couple months as lockups expire.”
Facebook, which hasn’t closed above the IPO price since its first trading day, touched $20.50 during trade today, just above a record low of $19.82 on Aug. 2. The company also posted slower user growth in the second quarter and is facing concerns about how quickly it can boost mobile advertising.
Mobile is a key area of focus for Zuckerberg because users who log in via smartphones and tablets -- half of Facebook’s members -- are more active than those who use only the desktop version. Facebook has had little time to gain traction in mobile advertising, having just announced its first advertising platform in February.
Facebook unveiled a new mobile-advertising service today designed to help software developers woo more users to their applications.
“The company really needs revenue acceleration right now to instill confidence in the market,” Anthony said.
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