The Next Move for Facebook

Written by GSCR Staff   
Wednesday, 14 November 2012 12:58

I don’t remember a time when so much attention was paid to lockup agreements as has been the case with Facebook (NASDAQ – FB-$21.62). The stock was smacked the first time around, when it was reported that one of the leading financiers of the company sold a ton of stock, as did some insiders.

This time, however, the number of shares eligible for sale will increase by about one-third, tomorrow. Yet, the stock is up 9% today, to nearly $22. It looks like the market is telling us that there will not be wholesale selling, at least at the outset, and that the stock, at current levels, is fairly priced.

It seems to me that the stock could drop 10% or more in the next few trading sessions, making all the hoopla much ado about nothing. Unless you short the stock or buy puts, which is not  a bad idea.

Note: The author does not own any positions in this security.

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