Company: FB (NASDAQ) – Facebook Inc.
Overview: Recently, offering their stock on public markets, it is safe to say that Facebook Inc. has experienced some rough patches. The stock price has decreased around 44% since the company IPO’d on May 18, 2012 and now sits around $21. With the lockup restrictions being lifted, it will be interesting to watch the stock price as markets re-open on Monday morning.
Current Share Price: $21.18 (November 3rd)
While the stock price has significantly decreased, the future looks optimistic for those looking to invest in this social network at a lower price. With the successful mobile platform and huge advertising potential for developers, Facebook Inc. is definitely worth another glance when deciding on a future portfolio investment.
1. Lockup Restrictions Lifted: As these restrictions begin to expire, Facebook executives are quick to sell their shares of the company. Sheryl Sandberg, Chief Operating Officer, sold more than 350 000 shares worth $7.44 million on Friday. In addition, the company’s General Counsel and Chief Accounting Officer also sold over 400 000 shares combined. This piece of news worries investors especially since none of these insiders previously indicated that they would be selling their shares of the company. Repercussions of these actions are ultimately expected to have a negative impact on the stock price on Monday morning. Check out this article for more details!
http://online.wsj.com/article/SB10001424052970204846304578095364077160402.html
2. Low Stock Price:Like mentioned earlier, it is more than likely that the stock price will further drop due to recent turbulence with insider share holdings. This is a great opportunity for investors to invest in the company on a low and the stock price will increase in the future when developers are granted access to advertise their applications on the social network.
3. Facebook Mobile: This social network is without a doubt, leading the pact when it comes to mobile advertising. As smartphones are becoming a way of life, developers are now, more than ever, interested in marketing their applications via Facebook. With smartphone makers creating larger screens for more advertising space, it is only a matter of time before Facebook Inc. becomes one of the most sought-after platforms of online marketing.
With Facebook’s top executives being skeptical about the company’s future and selling their shares, this raises questions to the average investor about loaning their money to the social network giant. However, the company’s CEO, Mark Zuckerberg continues to be optimistic about the future and chose not to sell any shares when the lockup restrictions were lifted at the end of October. If investors have holdings now, it is recommended they sell at market open to minimize short-term losses and later repurchase to take advantage of the low stock price and future advertising potential.
Decision: Sell Monday, Buy later this week.