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Facebook falls as lock-up expires

The Associated Press

Shares of Facebook Inc. fell in trading Friday after another 156 million shares of the company became available for potential trading.

THE SPARK: Friday marked the expiration of Facebook's fourth lock-up period, which limits trading by company insiders after an initial public offering. The shares now available were held by early investors and others who participated in its IPO, except those held by CEO Mark Zuckerberg,

THE BIG PICTURE: Lock-ups are common after initial public stock offerings and are designed to prevent a stock from experiencing the kind of volatility that might occur if too many shareholders decide to sell all at once.

Friday's expiration follows those in August, October and November, which was the largest lock-up period of all. Its final round of shares restricted under these rules will become eligible for sale in May.

According to regulatory filings, 47 million shares held by the Russian Internet company Mail.ru Group and DST Global, both of which made early investments in Facebook, will be eligible for sale beginning May 18.

Facebook went public in May at $38 in a much-hyped initial public offering of stock that turned out to be a letdown for investors.

SHARE ACTION: Facebook's shares plunged after its debut. Its stock price began to recover slightly in November, gaining nearly 32 percent during the month and holding fairly steady in December. But shares fell 96 cents, or 3.4 percent, to $27.28 in afternoon trading.