San Jose (Calif.) Mercury News
Facebook's stock price rose nearly 13 percent Wednesday, in a surprising show of strength on a day when many had expected the shares to suffer from a wave of selling by insiders who were newly released from trading restrictions.
Wednesday was the first day that insiders were freed from a six-month lockup restriction that barred them from selling roughly 800 million shares of Facebook stock. But despite earlier warnings that the price might be driven down by a sudden influx of new shares on the market, Facebook stock had its second-best day of trading since the company's initial public offering in May.
The stock gained $2.50, closing Wednesday at $22.36. While that's still a far cry from the IPO price of $38, the gain marked a reversal from a downward trend seen in recent days. Facebook's stock had fallen as low as $17.55 over the summer.
Investor confidence appears to be strengthened by Facebook's last earnings report, released Oct. 23, which showed new growth in mobile advertising revenue, analysts said. Although the stock showed a high volume of trading Wednesday, many investors apparently decided to hold on to their shares. That was not the case when two other lockups expired in August and October.