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It's funny that all these analyst can talk about such vague suggestions when it seems clear that different investors have clear motivations here. It's perfectl

It's funny that all these analyst can talk about such vague suggestions when it seems clear that different investors have clear motivations here. It's perfectly reasonable for Microsoft to hold on to their shares--even if facebook goes broke they still have billions in cash. Thiel will probably sell part of his stake--you don't hang on to 1.5 billion by being overly concentrated in any one area. Other investors (VC's and funds) will almost certainly sell most or all of their stakes. There's no expectation of 10x or 5x returns anymore and a fair amount of downside risk. I expect 90% of individuals with stock options to sell as they can. If I have a choice between selling at $20 now and getting, say, $200,000 or waiting some unspecified time and possibly getting more (or nothing), I'm going for the sure money every time. Even for someone whose pay is in the low six figures, option money like this can mean paying for your kids' college education or starting your own business. The only ones who might hold on would be those who don't have many shares/options (I'm thinking less than 2,000).

jpdoctor 14y ago
> It's perfectly reasonable for Microsoft to hold on to their shares--even if facebook goes broke they still have billions in cash. Common shareholders are last in line when a company goes broke.
- tedunangst 14y ago
  Microsoft has billions in cash.
roc 14y ago
Beyond the strict money value of those shares, Microsoft gains business value from being a large and influential investor in Facebook. That can make up for quite a bit of strictly monetary opportunity cost.
duaneb 14y ago
> I expect 90% of individuals with stock options to sell as they can. If I have a choice between selling at $20 now and getting, say, $200,000 or waiting some unspecified time and possibly getting more (or nothing), I'm going for the sure money every time. Even for someone whose pay is in the low six figures, option money like this can mean paying for your kids' college education or starting your own business. The only ones who might hold on would be those who don't have many shares/options (I'm thinking less than 2,000). I think there's still a lot of energy/optimism at Facebook inside its own Reality Distortion Field. Even if Facebook doesn't recoup its value for years, there's still a lot of money to be bad. Remember that not everyone makes the same decisions you do.
pyoung 14y ago
I imagine a good number of employees have stock options, which means that, depending on the price of the option, they would not have any value to them. One thing to keep in mind however, is that it is not uncommon for companies to do a re-price of their stock options if the options are worthless. I wouldn't be surprised to see FB do this if the stock hangs this low for a while.

jpdoctor 14y ago

> It's perfectly reasonable for Microsoft to hold on to their shares--even if facebook goes broke they still have billions in cash. Common shareholders are last in line when a company goes broke.

tedunangst 14y ago
Microsoft has billions in cash.

roc 14y ago

Beyond the strict money value of those shares, Microsoft gains business value from being a large and influential investor in Facebook. That can make up for quite a bit of strictly monetary opportunity cost.

duaneb 14y ago

> I expect 90% of individuals with stock options to sell as they can. If I have a choice between selling at $20 now and getting, say, $200,000 or waiting some unspecified time and possibly getting more (or nothing), I'm going for the sure money every time. Even for someone whose pay is in the low six figures, option money like this can mean paying for your kids' college education or starting your own business. The only ones who might hold on would be those who don't have many shares/options (I'm thinking less than 2,000). I think there's still a lot of energy/optimism at Facebook inside its own Reality Distortion Field. Even if Facebook doesn't recoup its value for years, there's still a lot of money to be bad. Remember that not everyone makes the same decisions you do.

pyoung 14y ago

I imagine a good number of employees have stock options, which means that, depending on the price of the option, they would not have any value to them. One thing to keep in mind however, is that it is not uncommon for companies to do a re-price of their stock options if the options are worthless. I wouldn't be surprised to see FB do this if the stock hangs this low for a while.