5 ms·
The problem is that a lot if people bought these shares under false pretenses. Decent returns are not visible to anyone who is truthful and open minded. There a
by rustynails 14y ago
The problem is that a lot if people bought these shares under false pretenses. Decent returns are not visible to anyone who is truthful and open minded. There are two paths in this circumstance - sell now and cut your losses by buying something that will return better, or sell later at an almost certain lower price, and lose that potential in the mean-time. If it were me, I'd cut and run now.
- viscanti 14y agoThere weren't a lot of "false pretenses". Anyone who bought Facebook post-IPO did so with access to a lot of information that said the company wasn't worth 100 Billion dollars. There certainly wasn't a clear path to them being worth more than that any time soon (which would make holding the stock fairly pointless). Facebook needed a lot of breaks to ever get the stock above the IPO price. That was (and still is) a long-shot. The fact that people bought post-IPO stock with irrational expectations isn't a problem (at least not for anyone other than the buyers, who paid a lot to learn a valuable lesson). The interesting problem here is what employees will decide to do. It's not obvious that Facebook stock will go up any time soon. It's probably a reasonable thing for employees to diversify their holdings (which means liquidating a large portion of their facebook stock). It will be interesting to see how individual employee decisions end up pushing the stock price.