Facebook shares dip on staff sell-off
Facebook shares have fallen 3.8% on the day employees became eligible to start selling restricted shares in the social networking giant.
Staff were meant to be able to sell their vested shares on Monday, but US markets were closed for two days due to storm Sandy.
"Lock-up" provisions on some shares are common in stock market flotations.
They aim to avoid the volatility that can occur if too many shareholders decide to sell at once.
However, Facebook's shares, which began trading at $38 in May, have since lost about 50% of their value.
They closed at $21.11 on Wednesday.
Michael Pachter, an analyst at Wedbush Securities, said Facebook had timed its "unlocking" badly.
"I don't really understand why Facebook [chose] to unlock virtually all of its compensation within the year of its IPO (initial public offering), but they did," he said.
"They made a mistake and set the company up for volatility."
An additional 234 million shares are now eligible to flood the market.
Another 777 million shares held by employees, insiders and early investors will become available for trading on 14 November.
Last week, Facebook reported a $59m (£37m) loss despite seeing third-quarter revenues rise 32% compared with a year earlier.
The company is struggling to turn its online dominance into profits and investors are worried about its ability to keep growing revenues.