There is not likely to be much impact, of the 271
million Facebook Inc (NASDAQ:FB) shares that will be released from a lock-in on
Thursday, on the company's stock that has already been battered down about 45
percent from its May debut price.
The low price at which its shares are ruling may
actually work in its favour as the early investors, who are now free to sell
their locked-in shares, may opt not to sell but wait for the company's fortunes
to revive.
Can FB Rebound
After Its Recent Slump Find Here
Uncertainty over future growth prospects of the
company and its ability to sustain revenue momentum from marketers have been
the main reason behind the stock's poor performance. Its second quarter
results, and the first it made public after its IPO, showed that its revenues
growth had slowed and its earnings were lower than expected.
The No. 1 social network also failed to provide
guidance for the year and this has added to the uncertainty in the market.
Facebook shares closed at $21.20 on Wednesday.
"If Facebook was trading at $30, we would see a
much larger effect from the lockup expiry. But at $20? Not so much,” Steve
Place, a founder of options analytics firm investingwithoptions.com in Mobile,
Alabama told Reuters.
The derivatives segment, especially options trading
indicate a move of little more than 6 percent by Friday - more investors
expecting a dip in shares than a rise, but this is nothing out of the ordinary.
The big investors whose holdings will be released from
the lock-in are Accel Partners, DST Global, Microsoft Corp and hedge fund
investor Peter Thiel.
Thiel, who had sold a portion of his holdings at the
time of the IPO, is already known to have converted some portion of his shares
from Class B to Class A shares that are easier to sell in the market.
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List Of Insider Trading On FB Here
Thiel and Accel were among the earliest backers, so
they're likely to make a big profit. Microsoft invested $240 million in 2007 at
an assumed valuation of $15 billion for Facebook; at its current stock price
the company is worth about $45 billion. DST bought shares at different prices,
Reuters said.
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