(CNN) -- Facebook's life as a public company has been a nightmare from day one, and the pain continued on Thursday as some company insiders got their first chance to dump shares.
Facebook stock fell nearly 7% Thursday morning, hitting a new intra-day low of $19.69. By about 1 p.m. ET, shares were holding around just above $20.
About 22 million shares changed hands in the first 10 minutes, and by the early afternoon., that volume soared to 111 million. About 271 million shares are newly eligible for sale Thursday.
Like many initial public offerings, Facebook's May 18 debut debut included a "lockup" agreement that requires some shareholders to hold on to their stock for a certain period -- typically 90 to 180 days. Lockups are meant to prevent the market from being swamped with too many of a company's shares immediately after an IPO. Keeping stocks scarce can help boost their value.
But when a company's locked-up shares are set free, the stock typically tanks, since millions of new shares flood in at once. A big slide on Thursday would be painful for Facebook (FB), which has lost nearly half its value since its debut.
Facebook's fellow newly public Internet companies felt the pain when their lockups ended. LinkedIn (LNKD) slumped as much as 7% on its lockup expiration day, and Groupon (GRPN) fell 10% to hit a new low.
Thursday is only the first in a series of lockup expirations for Facebook. Its unusual staggered system means several more expiration days are coming, and a total of 1.8 billion shares could hit the market in the next nine months.
The big Facebook stock dump could come in mid-November. That's when Facebook will convert the special form of restricted stock units, or RSUs, held by most of its staff into actual shares of its stock.
Facebook's employees will owe taxes this year on the value of that stock. Like most companies that issue RSUs, Facebook is handling the logistics on its employees' behalf. The employees are still ultimately responsible for making sure their tax bills are fully covered.
Facebook plans to withhold a big chunk of its employees' shares -- roughly 120 million -- and sell them on the open market to cover the tax bill. Selling off so many shares at once could hammer the company's stock price. So Facebook has a Plan B: It can tap its credit lines and cash reserves to pay off the tax bill without issuing equity.
A Facebook representative declined to comment about which route the company plans to take, but the company has carefully lined up its options. It took out a $3 billion credit line specifically earmarked for the potential RSU-linked tax bill, and it's currently sitting on $10 billion in cash.
At Facebook's current share price, the tax bill would total around $2.6 billion. If its stock price keeps dropping, that bill will shrink further.
Facebook did get a vote of confidence from one investor last week. Netflix (NFLX) CEO Reed Hastings, who's also a member of Facebook's board, disclosed to regulators that he recently bought $1 million worth of shares in the social network.