Flood of Facebook Shares For Sale

[DZ]

http://www.cnbc.com/id/43672780/Flood_of_Facebook_Shares_For_Sale

By: David Faber
CNBC Anchor and Reporter

In recent days there has been a pronounced increase in offers of Facebook shares, according to the participants in the burgeoning world of private sale shares.

With its price having moved up to the $33-$34 range on the low-volume secondary exchanges such as Second Market, big holders of Facebook shares who have been holding out for a price in that range, have had firms such as Wedbush Securities and BTIG in the market offering their stock at those prices.

So far no big trades have taken place. But plenty of calls are being made to try and place this stock.

At present there is a five-million-share block being shopped at $35, while I'm told another four million shares have been for sale at $33.50. The sellers here are typically former insiders and consultants, although I'm also told one institution that bought into Facebook sometime back is now looking to get out.

Another reason for the increased activity may be due to the window for such sales getting closer to closing as Facebook itself moves closer to an initial public offering that would bring a lock up of shares. Facebook has to sign off on any new owners, but so far this year has approved all such changes.

At a price of $34, based on Facebook's 2.5 billion outstanding shares, the implied value of the company would be $84 billion.

 

[DZ]

I just thought this would interesting for anyone looking to buy in when they finally go public. There's obviously been a lot of hype around Facebook's IPO, but I've heard before this article of people being offered private shares. I was offered some at $33, then $33.50 a few months back, through some vague connection on LinkedIn. I expressed interest initially after I was contacted, but held off sensing something was fishy. Then the other day, I was speaking to a family member who trades regularly and was told they were offered private shares of Facebook in the low 30s. Just seems odd with the highly anticipated IPO right around the corner that these private stock holders are now trying to dump. I'm glad I didn't jump in before because now those red lights are flashing after reading this article.

 

[selkirk]

Deezy Facebook is going to do well, very well, they will price the ipo so it pops, since down the road they will want to unload more....

I am very negative on Groupon but have covered quickly all shorts, on the stock...facebook will probably lift all boat in social media stocks, so though I have questions on Groupon and zynga ect, will wait until they go higher, now is not the time to go short.

currently long on the tech sector, have to see what happens.
long time holding open text went up 14% on earnings, that is the good news, bad news sold 75% before earnings...:shrug:

Facebook is priced very high however the company is growing at a great rate, Google when it ipo at 85 was then priced high...they delivered and the stock went higher, was not in it, just to high of muliple and questions.

Facebook should go higher in the short term, longer term can they keep the growth rate up,
not sure, lots of potential...there is plenty of tech trading cheap, so will buy those stocks...Facebook is the ultimate growth momentum stock.

as for buying a stock private there are plenty of risks, word of caution there has been 3-4 very good scams that I heard of, always be carefull.

thanks
selkirk

 

[DZ]

as for buying a stock private there are plenty of risks, word of caution there has been 3-4 very good scams that I heard of, always be carefull.

Just saw your reply selkirk. Thanks for the insight. I don't have much experience myself diving into IPOs or private stock for that matter. As for your words of caution, that is definitely something I considered when deciding not to buy before it went public. Just seems too risky.

Another strategy I've broached involves the expected IPO pop you mentioned. Once again, I don't have much experience with this, but my thought was to jump on it the minute it becomes available to the public and then look to sell mid-day or even earlier. Much like Groupon, which you brought up, I expect that it will climb rapidly in the first few hours then fall some. Now, obviously we expect it to do better long-term than Groupon (which still hasn't turned a profit I believe) but their early stock climb will have to do largely with the hype around their opening I should think and it would it be a good opportunity to make a quick buck. Maybe I am talking out of my ass on this a little bit, and I am more in the practice of 'going long', but I saw this pattern with Zynga, which opened at 10 and popped up to 11.5 before dropping back to around 10, and Groupon, which opened at 20 and got as high as 27 before falling back to earth.

Selkirk, do you have any thoughts on this approach?

:0003

 

[selkirk]

Deezy it is not a bad idea, however if you do this make a stop loss, and have a clear idea of what actions to take...

for example there is no idea if you can get a run and how long, or if you are the one that buys it at the top...sometimes these last days hours or minutes.

a good friend bought into a jr. mining stock, he was watching it, and they reported drill results, that were incredible. so the stock pops from 3.50 to 5.75. well he bought in at almost the complete top.

he told me should have never bought it, however his mistake is that he held onto for a day, then a week, so he has it for over a month and lost close to 15%. when the steam is done, leaves.

know how long you will be in the trade and the loss you would take.

the market is in a bullish mood, europe is still a mess but better than it was, there was still plenty of questions, however the market goes up or stays flat even on negative news, a good sign.

mildly bullish. or worried bull.

thanks
selkirk

 

[DZ]

Nasdaq told traders Thursday that Facebook shares are expected to be released for trading at approximately 11 a.m. EDT (1300 GMT) Friday. The IPO will be released for quotation at about 10:45 a.m. in the run-up to open trading. The exchange also said it will hold a market-wide conference call at 10:15 a.m. to keep the industry informed on the IPO. The call will last two hours.

Financial advisers at Morgan Stanley Smith Barney have been told their allocation of shares of Facebook for clients has been raised to a maximum of 5,000 per account, from roughly 500, according to people familiar with the situation.

Here's a look how much Chairman and Chief Executive Mark Zuckerberg's 533.8 million shares are worth: $20.3 billion. "Zuck," as he's known to friends and family, launched Facebook from his Harvard dorm room in 2004. The hoodie-wearing college dropout is now one of the richest people in the world. He will be celebrating his birthday in style--he turned 28 on May 14.

It is a testament to the stupendous wealth of megacap tech companies that Facebook joins the club as one of its poorer members. At the $38-a-share offer price, Facebook itself will raise nearly $7 billion. Add cash already on its balance sheet, and it begins life as a public company with about $11 billion total. About 60% of the cash raised in the social network's IPO is going straight to selling shareholders, not to the company.

Let's put Facebook's overall market value of $104 billion in perspective. Only 21 companies in the S&P 500 have higher market caps. Valuation puts Facebook behind Apple, Microsoft, Google and Intel, but above Amazon, Cisco Systems and Disney --each of which had 10 times more sales than Facebook in their most recent fiscal years. Looked at another way: Facebook is considered more valuable than the combined worth of eBay, Yahoo, Groupon, LinkedIn, Netflix, IAC/InterActiveCorp, AOL, Zynga and Pandora Media. You decide which you would rather own.

Market watchers are weighing in. Both retail and institutional investors will want to add to their positions in Facebook, which should drive demand for the stock once it begins trading, said Ben Holmes, president of IPO research firm Morningnotes.com. "It's like Visa. It's a widely held, superbly oversubscribed offering," said Holmes of the IPO. "But at the end of the day, there isn't enough stock to go around...this is going to be a really beautiful deal."

-By Linda Fung, Dow Jones Newswires, 212 416 2163, linda.fing@dowjones.com.

 

[selkirk]

kind of a sign of the market we are in. Facebook, had the ipo and touched the ipo price, it did not get the pop many people expected, many thought 45-48, I was thinking 40-42 easy.

have a large amount of cash and wish it was more, have small holdings in barrik gold, yamana gold, and candian natural resources, and tck, despite having options covered and some uncovered still have small losses on these positons, except yamana. the resource stocks have gotten killed and are extremely cheap however will wait until they show some strength to add to the positons. have a large amount of cash and wish it was more.

Facebook is very expensive but unlike Groupon and Zynga have a business model that can work, like linkedin, which is a great stock, poor price. they will have to win on mobile and take over the search game from google if they want to make shareholders of the ipo happy, and make them money.

thanks
selkirk

 

[DZ]

Glad I never touched this sham of an ipo. Maybe it's worth a buy around 20-22? :shrug:
Down to 28 today.......