The number of investors short selling Facebook Inc (NASDAQ:FB) stock dropped as the expiration of the lockup period approaches, reports WSJ. This a positive sign for Facebook, despite the fact that the shares of the company dropped during the previous weeks.

Facebook’s stock price declined due to concerns that the employees of the social networking giant would sell their shares in the company after the lockup expiration on November 14. The shares of Facebook Inc (NASDAQ:FB) are down by 0.85 percent to $19.89 per share on Tuesday afternoon.

facebook shares

Last October 24, the stock price of Facebook Inc (NASDAQ:FB) surged by 20 percent to $23.49 per share after the company reported better-than-expected earnings during the third quarter of 2012.  Since then, Facebook started to decline and it is trading in the range of around $20 per share.

According to SunGard Financial Systems’ Astec Analytics Unit, which tracks short-selling data, the number of investors short selling Facebook declined by almost 40 percent this month. The number stayed at the lowest level since June, according to SunGard Financial Systems.

Karl Loomes, market analyst at SunGard’s Astec Analytics said, “Everything would seem to indicate the market is losing its appetite to short. He suggested that short sellers might be thinking that the stock has no room to fall further at its current price of under $20 per share. The stock value of the company has dropped by almost 50 percent from its $38 per share IPO price.

Loomes also speculated that early investors that are eligible to sell their shares in the company decided to keep their holdings, just like Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg. He promised that he would not sell his stakes in the company until September 2013.  Zuckerberg’s 504 million shares will be free from sales restrictions during the upcoming lockup expiration.

Loomes said others might follow Zuckerberg’s decision to keep their holdings in the company, which shows signs of confidence in the company.” He added, “Whatever the reason, all signs suggest there are fewer bets being placed on Facebook’s share price collapsing this week than we might expect.”

On November 14, approximately 779 million total Facebook Inc (NASDAQ:FB) shares will be available for sale. Last month, Citigroup analyst, Mark Mahaney said, “Yes lockups loom, but we believe long-term investors can use weakness around said lockups as a way to leg into a fundamentals positive/valuation reasonable long.”

Perhaps, Facebook Inc (NASDAQ:FB) gained investors confidence after its third quarter earnings report, and they believed that the company is capable of boosting its advertising revenue.