The lock-up expiration freed up 437 million Alibaba shares for sale. That's more than the company sold in its IPO last September. Fred Katayama reports.
Big investors getting their crack at selling shares and cashing in on Alibaba. A lock-up period for the Chinese e-commerce company expired Wednesday. That freed up 437 million Alibaba shares for insiders to sell -- more than it sold in its IPO. That $25 billion initial public offering in September was the largest ever. The company's shares have risen 24 percent since then. But they're down roughly 30 percent from their November peak. Besides locking in profit, investors may have other reasons to shed the stock. Alibaba disappointed investors with its latest sales in the holiday quarter. And it sparred with China's powerful regulator after the watchdog's report criticized Alibaba for not doing enough to stamp out fake goods sold on its platforms. The regulator has since retracted its report. Some investors may also recall what happened to Facebook when its first lock-up expired. Its shares fell sharply to a record low. Alibaba shares rose in early trading. Wedbush Securities analyst Gil Luria doesn't think the shares will come under a lot of additional pressure, saying, "Alibaba trades so much, some 16 million shares a day, $2-3 billion a day. All those shares won't hit the market immediately." For Alibaba, the biggest lock-up period comes in September. Four times as many shares will be freed up then, so that could have a bigger impact on the stock.