- Lock-up releases will likely lead to hundreds of millions of new shares being dumped on the market over the next six months ... and Facebook can no longer do a simple "follow-on offering" to manage this process.
- Facebook faces a massive ~$3 billion tax bill related to its employee stock compensation and can no longer do what it planned to do, which was sell shares to raise this cash.
- Facebook employees now have less incentive to stay at the company than they did prior to the IPO, which may make retention more difficult and expensive.
FACEBOOK LOCK-UP RELEASES:
August 15th, 2012 (next Thursday): 268 million shares, 10% of shares outstanding.
October 14th: 249 million shares, 9% of shares outstanding.
November 13th: 1.332 billion shares, 49% of shares outstanding.
December 13th: 124 million shares, 5% of shares outstanding.
May 17th, 2013: 47 million shares, 2% of shares outstanding.
So yeah, this stock is pretty much screwed
Basically people, Facebook is doing a buyback of approx $2 billion. Interesting.
See SEC filing right here : http://www.sec.gov/Archives/edgar/data/1326801/000119312512379221/d405186d8k.htm
As a side-note. The way I see it, FB and GOOG might have a lot in common for the mere fact that they peer into everyone's life and searches reveal a lot about future behavior and popular trends.
I hope you shorted FB prior to now too and made some good money. Cheers and keep the good ideas coming. Tim