FACEBOOK shares sunk to fresh lows yesterday 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 last night to set a record low below $20 (£12.70) 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 $49bn (£31.2bn) wiped from its value since its $104bn (£66.2bn) flotation in May when it was priced similarly to giants Amazon and PepsiCo at $38.

The value of shares held by its chief executive Mark Zuckerberg has fallen to $9.9bn (£6.3bn) from $19.1bn (£12.2bn), although he already pocketed more than $1bn 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 (£28.60), but have 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.