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But sentiments started to shift Thursday as the volume of shares being returned to the lenders outstripped the number being borrowed, Smith said. The cost to borrow Facebook shares also has been declining, a sign that short-selling demand is waning.

Facebook’s stock might be finally bumping along its bottom,” Smith said.

Considering the heavy trading volume, Facebook’s stock would have fallen more dramatically if buyers hadn’t stepped in, said Louise Yamada, a technical analyst who runs her own research firm.

She suspects Facebook insiders are being careful not to flood the market with stock. “They’re smart enough to know if they sell at the same time, the stock would fall,” Yamada said.

It has been a rough run for Facebook. After one of the most-anticipated IPOs in history, Facebook had perhaps the most-botched stock market debut as glitches marred its first day of trading. Things have gotten progressively worse as Facebook’s market value has plunged by about $49 billion.

The downfall stems from doubts about Facebook’s ability to fend off intensifying competition from Internet search leader Google Inc. while trying to develop a plan for increasing the amount of revenue that it brings in from a worldwide audience of 955 million users.

The uncertainty means Facebook’s stock is likely to be volatile until the end of the year when the majority of the lockups expire. Hamadeh views the end of those selling constraints as a “dark cloud on the horizon.”

“There is no way around it. It’ll be painful,” he said. “But hopefully once that selling pressure is gone, it will find its floor and could be a basis for a more stable stock through 2013.”


AP Business Writer Bernard Condon in New York contributed to this story.