Facebook Shares Rise as More Shares Hit Market

Media

Published: November 14, 2012 2:26 pm

In a counter-intuitive development today, shares of Facebook Inc. (NASDAQ: FB) are up more than 11% as roughly 800 million newly tradable shares of the company’s stock hit the market. Today marks the last of the big lock-up periods for the company since its Spring IPO.

There are plenty of explanations for the run-up in share prices. One is pent-up demand for the stock, but then why did everyone wait until the share price jumped? Another is that investors are buying on a short squeeze. That’s certainly possible.

A combination of the two is also possible. Investors have been waiting to buy Facebook shares until the lockup period expired, which encourages existing shareholders to hold onto their shares. That adds to the pressure on short sellers, boosting investors’ confidence and the share price.

Another possibility is the company’s introduction today of a new social jobs app that includes partners like Monster Worldwide Inc. (NYSE: MWW). The new app gives job seekers access through Facebook to about 1.7 million jobs. The announcement sent shares of LinkedIn Corp. (NYSE: LNKD) plunging earlier today, although the stock is now down less than 1%.

The timing of Facebook’s announcement of its social jobs app is surely no accident, and was set to give shares a boost today. The strategy seems to have worked out. Facebook’s shares are up nearly 11.5% at $22.13 in a post-IPO range of $17.55 to $45.00.

Paul Ausick

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