Facebook shares have sunk to fresh lows after early investors were allowed to ditch the stock for the first time since its flotation.
The social networking giant's shares fell 6% on Wall Street on Thursday night to set a record low below 20 US dollars (£12.7) after investors who bought into the company before it went public were allowed to sell up to 271 million shares as a "lock-up" period expired.
Facebook has now seen some 49 billion US dollars (£31.2 billion) wiped from its value since its 104 billion dollar (£66.2 billion) flotation in May when it was priced similarly to giants Amazon and PepsiCo at 38 dollars.
The value of shares held by its chief executive Mark Zuckerberg has fallen to 9.9 billion dollars (£6.3 billion) from 19.1 billion dollars (£12.2 billion), although he already pocketed more than a billion dollars at the time of its flotation.
The drop in Facebook's share price is being seen as a sign that insiders still think the stock is overpriced despite its recent falls, although some may simply be cashing in after a lengthy period of investment.
It is thought the stock will come under further downward pressure, as almost two billion shares are set to become eligible for trading when further lock-up periods expire over the next 10 months.
Facebook has 955 million users worldwide, but it has had a rough ride as a listed company. Its long-awaited stock market debut, which created a thousand millionaires including a small number of the 100 London-based staff, was delayed by a technical glitch.
Shares briefly peaked at 45 dollars (£28.60), but have since come under pressure amid fears that its popularity will prove to be a fad and it will struggle to generate profits from mobile phone users. There are also doubts over its ability to fend off intensifying competition from internet search leader Google.
Investors who were allowed to sell stock as part of the agreement included investment bank Goldman Sachs, Microsoft and former PayPal chief executive Peter Thiel. It will not be known until at least next week which of them offloaded stock, but more than 156 million shares were traded yesterday - more than five times the stock's average volume over the past month.
Mr Thiel invested 500,000 dollars (£318,136) in Facebook in 2004, the year chief executive Mr Zuckerberg began the site in a Harvard dorm room. After selling 16.8 million shares for 640 million dollars (£407 million) at the time of the initial public offering in May, Mr Thiel still owned nearly 28 million shares worth around 560 million dollars (£356 million) at Thursday's trading prices.