Facebook hit by new share price worries and app developer row
Social network accused of deception as investors brace for share price fall.
Facebook’s shareholders are preparing themselves for further losses when the ban on early investors selling their shares begins to lift on Thursday 16 August.
One of the first shareholders that will have the opportunity to divest will be Accel Partners, a technology focused venture capital fund based in Silicon Valley. It bought shares when Facebook was valued at just $98 million (£62 million). Ttoday its holding is worth $3.3 billion (£637.7 million).
Other high profile early backers, who bought into the company during its initial public offering (IPO) in May, include Goldman Sachs and Microsoft.
The ban’s rollback will peak in November, with industry watchers suggesting that half of the 268 million shares eligible for sale from 16 August could be auctioned over the coming months.
"It remains a real risk that shares will be sold on to the market and temporarily depress prices as the market could struggle to absorb an expanded float," said analyst Brian Wieser of Pivotal Research Group.
Facebook has also found itself at loggerheads with app developers, after the US Federal Trade Commission (FTC) accused the company of deceit.
The social networking site was reportedly paid up to $95,000 (£60,600) by developers who entered their apps into its verified apps programme. However, an investigation by the FTC showed that Facebook did nothing to verify its security, despite stating it would be subject to a “detailed review process”.
“[Facebook] took no steps to verify either the security of a verified application's website or the security the application provided for the user information it collected, beyond such steps as it may have taken regarding any other platform application," the FTC said.