Facebook dives below $20 for the first time

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Facebook shares crumbled again on Thursday, sending the once-feverishly sought-after name below $20 for the first time as investors scrambled to get out of the way of a potential share deluge in coming weeks.

Thursday marked a five-day losing streak for the stock. Facebook has shed almost $50 billion in value since its debut -- more than the total valuation of Hewlett-Packard Co or Starbucks Corp. The stock debuted at $38 and has headed south since, pummeled by growing doubts about its lofty valuation, growth prospects, high-profile departures.

Now, investors are struggling to understand the impact of the expiry on August 16 of a lockup period on insiders' sales. That's when the first restrictions barring employees and early investors from selling goes away, opening a spigot to roughly 1.88 billion additional shares for trading by year's end.

Some investors said the stock's downward slide may actually lessen the deadline's impact as insiders opt to wait. But at the very least, doubts about Facebook's business permeating Wall Street will keep the shares constrained for some time.

"Just because the lock-ups expire doesn't mean people are going to rush to the exits," said Topeka Capital Markets analyst Anthony Victor. But he saw little upside in the near term.

Predicting whether Facebook insiders will sell their shares, even as the stock plumbs new lows, is a tricky. Most Facebook employees have restricted stock units -- considered a major draw in fast-growing Web powers' drive to attract top-flight talent -- but are given years to sell them.

Unlike options which become worthless if a company's stock price falls below an option holder's "strike price," restricted stock units always provide a profit to the employee they were granted to - it just diminishes as the price declines.

Many Silicon Valley employees count on big paydays when their company goes public: it could mean the chance to pay off hefty college loans, or a down-payment on a first home.

One Facebook employee expects to sell a smaller portion of his stake in the company than he otherwise would have, given the drop in the stock price.

"I will definitely take some. But my debate is how much," said the employee, who asked to remain anonymous.

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