Shares in Facebook have slumped to new record low, down 6.2% to just $19.87 (£12.64) per share.
The fall has occurred as investors were given the opportunity to sell ‘locked up’ shares for the first time since the initial floatation.
Locked up shares belonged to pre-float investors who were prevented selling their holding when the company went public, but these shares have now flooded into the market, bringing the share price further down.
Prices had reached a high of $45 (£28.66) in the days and weeks after the IPO but since concerns have been raised due to the consistent fall. Now, market analysts are waiting to see what major shareholders, such as Goldman Sachs and Microsoft will do now that the resolve of long term investment is put to the test.
Reports have also emerged which suggest the possibility of more direct advertising strategies to be introduced to the social network which would allow companies to place adverts directly onto users’ newsfeeds. This would broaden the reach of advertisements beyond the companies own ‘fans’, the users who have already ‘liked’ their page.
The new test phase follows concerns from advertisers about the success or lack thereof in Facebook advertising. Users however will have their own concerns about a greater intrusion of advertising materials, and it remains to be seen which side of this issue will come out the happier.