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Facebook shares jump 10% as restrictions on selling employee shares expire

Shares of Facebook jumped 10 per cent today, despite predictions that the expiration of an employee lockout on selling shares would negatively affect its share price.

Facebook's share price increased by $2.02 (£1.27) to $21.89 (£13.81).

Some 800 million shares owned by employees and early investors became eligible for sale today after restrictions, imposed in the aftermath of the social network's floatation in May, expired. Analysts predicted that sales of the shares could put pressure on Facebook's fragile share price, which has plummeted as much as 50 per cent from $38 (£24) to today's $21 (£13.25) since the firm's $104 billion (£64 billion) floatation early this year.

Tim Ghriskey, chief investment officer at Solaris Group, told Reuters he didn't expect Facebook insiders to sell their shares due to their low price.

"While the lock-up is expiring, there is nothing requiring anybody to sell. Given the low price, these long-term holders are deciding to hold the stock and that is lifting it here as the fear of the expiration subsides," he said.

Last week, Facebook's chief operating officer Sheryl Sandberg sold nearly $7.4 million (£4.7 milion) worth of shares after her restriction on selling share expired.

The social network's 28-year-old founder and chief executive, Mark Zuckerberg, has said he will not sell any shares before September 2013.