At the close, shares of the Menlo Park, Calif., company were at $22.36, up $2.50, more than 12 percent, after reaching $22.50 earlier.
Overall U.S. markets fell slightly.
The surge defied arithmetic and Wall Street expectations because the availability of more shares generally implies their price will fall. Public companies like Facebook, which have piles of cash, announce buybacks to reduce the number, boost the share prices and increase dividends.
Facebook, which first traded in May 18, buys back its shares but hasn't announced a dividend.
The 800-million share block that was released from the so-called “lockup” was the biggest since the IPO, when CEO Mark Zuckerberg, 28, and many initial investors sold shares. The company was initially valued around $109 billion.
Even with Wednesday's surge, shares of Facebook have still lost 41 percent of their IPO value. The company's market capitalization is about $48.4 billion.