Facebook Inc.’s 6.3 percent drop yesterday, after the end of restrictions on share sales by its biggest investors, was the second-largest post-lock-up decline among companies that have gone public since January 2011.
Only social-game maker Zynga Inc. tumbled more, losing 7.9 percent, on the first day that insiders could start selling their stakes, data compiled by Bloomberg show. That was the largest one-day post-lock-up descent among the 20 biggest initial public offerings since January 1, 2011. The slump yesterday left Menlo Park, California-based Facebook at a record low after a 60 percent increase in the number of shares available for trading.
“It might not be rational for the shareholders to sell all at once, but when someone in a theater yells ‘fire,’ people don’t act rationally, they stampede to the exits,” he said. “It might be fatal to your career to be viewed as the last chump to get out.”