Shares of Facebook (Nasdaq: FB), the No. 1 social networking site, plunged more than 5 percent when the market opened Thursday, as insiders were free to unload as many as 241 million shares.
In early trading, Facebook shares plunged to $20, down $1.20, only 18 cents above their record low set since the May 17 initial public offering that raised a record $16 billion for the Menlo Park, Calif., company.
While CEO Mark Zuckerberg is barred from selling his shares, virtually all the company's directors and early investors, such as Peter Thiel, a co-founder of PayPal; Reid Hoffman, chairman of LinkedIn (NYSE: LNKD) and others are eligible to cash out.
Even at Thursday's lower price, Facebook's price-earnings ratio remains around 118. By contrast, the P/E of Apple (Nasdaq: AAPL), the world's most valuable technology company, is only 14.86.