Facebook Inc (NASDAQ:FB) Saw Recovery On Hastings’ Small Buying (NFLX)

Does Reed Hastings, CEO of Netflix, Inc.(NASDAQ:NFLX), know something we don't? When the whole world seem to be eager to get rid of Facebook Inc (NASDAQ:FB) shares, Reed has quietly purchased $1 million worth of shares of the social network at a price of about $21.03 a share.

The shares have lost 45 present of their value since they made a disastrous debut in May this year at $38 a share.

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At a time when it looks like Facebook insiders and large investors who had invested in the company prior to its IPO, may be ready to cash out of the company, which has filed to live up to its hype, Hastings action looks rather strange to say the least.

Whether Hastings is a savvy investor however remains to be seen. At Netflix he sold his shares in the company when they were rising right up to when they reached $300 a share. Then when they crashed to $111, he stopped selling. Netflix shares are now trading at about $57 a share.

Here are some pertinent questions:

Is this purchase an indication that Hastings believes Facebook is a worthwhile investment?

Or is the truth more closely represented in saying that he believes it to be more worthwhile than his own company, Netflix?

How Should Investors Trade FB Now

Whatever the reason, Hastings is now deeply invested, and will have to wait, just like everyone else, to see if it pays off. An interesting note is that Hastings did not purchase any more Netflix stock, after the shares began tanking.

There are reports of Facebook Chief Financial Officer meeting its large investors, prior to the imminent release of lock-in shares on August 16.

The release of the lock-in will flood the market with more Facebook shares furthering dampening the price of the stock.