(Newser)
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Just as investors are souring on their plunging Facebook shares, comes a depressing reminder that millions of shares will likely soon flood the market. Starting in less than three months, select insiders and early investors will be allowed to sell their Facebook shares as the "lock-up period" currently preventing sales expires. Some fear the expected flood could further depress the share price, already down 26% from the initial $38. "This is a big issue hanging over the price of the stock," Stephen Diamond, professor of law at Santa Clara University, tells USA Today. Facebook's "stock price still has a way to go on the downside as the market takes account of increased supply" that will occur when the stocks go up for sale, he adds. The first lock-up expiration will free 268 million shares for possible sale. In less than six months, a whopping 1.7 billions shares will be unlocked.
