The stock fell 7 percent, or $1.49, to $19.71 in Thursday morning trading.
If the stock hits $19, it will have lost half its value since Facebook went public in May.
It's been a rough run for Facebook. After one of the most anticipated initial public stock offerings in history, Facebook Inc. suffered what may be the most-botched IPO as trading glitches marred its first day. It's been almost all downhill since then.
In all, 271 million shares become eligible for sale Thursday, on top of the 421 million already trading. It's conceivable no one would sell those extra shares, but if too many do, Facebook's stock could decline.
Firms ranging from Accel Partners to Goldman Sachs, Zynga CEO Mark Pincus and Facebook board members James Breyer, Peter Thiel and Reid Hoffman are among those free to sell stock they own. Microsoft Corp., an early Facebook investor, is another one, though it's unlikely to sell because of partnerships it has with Facebook.
It's not yet known whether anyone had sold shares. The stock price decline could reflect investor anticipation of such a move.
Other shareholders, including many Facebook employees, will be able to sell beginning in October. The last lockup period expires next May, a year after the initial public offering.
Facebook Inc. is based in Menlo Park, Calif.