cancel2 2022
Canceled
There's nowt so queer as folk, as they say in Yorkshire!!
IPO lockup expirations just ain't what they used to be. Back in my day, a bottle of soda cost just $0.15, we used to have to ride our horses to work through six feet of snow, and freshly public companies facing a lock-up expiration were destined to tank. Nowadays, that last bit of formerly accepted wisdom doesn't quite pan out as reliably as it used to. In August, Yelp (NYSE: YELP ) shares skyrocketed by 25% the day its lockup restrictions on insiders expired. That made me feel rather silly since I figured shares would tank once early investors were permitted to flood the market.
Well, the same storyline played out today for Facebook (NASDAQ: FB ) , with shares jumping by as much as 11% on its own IPO lockup expiration. Is the lockup expiration sell-off a thing of the past?
Not last or least
The captain has turned off the "fasten seatbelt" sign. We're talking about a total of 804 million shares that are now permitted to roam around the cabin freely. This is by far the biggest block of shares related to the IPO that are being unshackled, so most were expecting some selling pressure. That nearly doubles the amount of shares floating around out there, which was approximately 921 million before today.
Just because insiders can sell doesn't mean they have to, and the lack of selling pressure today implies they think shares are too cheap. That's a positive side for us outsider investors who aren't privy to as much detail to Facebook's inner workings.
This lockup is the biggest but it's also not the last. There are two more lockup expirations on the horizon, so investors still have a couple of dates to circle on their Facebook event calendar. The next one is on Dec. 14 for roughly 155.9 million shares held by selling stockholders from the IPO (excluding Mark Zuckerberg).
http://www.fool.com/investing/gener...ends-the-lockup-expiration-bears-packing.aspx
IPO lockup expirations just ain't what they used to be. Back in my day, a bottle of soda cost just $0.15, we used to have to ride our horses to work through six feet of snow, and freshly public companies facing a lock-up expiration were destined to tank. Nowadays, that last bit of formerly accepted wisdom doesn't quite pan out as reliably as it used to. In August, Yelp (NYSE: YELP ) shares skyrocketed by 25% the day its lockup restrictions on insiders expired. That made me feel rather silly since I figured shares would tank once early investors were permitted to flood the market.
Well, the same storyline played out today for Facebook (NASDAQ: FB ) , with shares jumping by as much as 11% on its own IPO lockup expiration. Is the lockup expiration sell-off a thing of the past?
Not last or least
The captain has turned off the "fasten seatbelt" sign. We're talking about a total of 804 million shares that are now permitted to roam around the cabin freely. This is by far the biggest block of shares related to the IPO that are being unshackled, so most were expecting some selling pressure. That nearly doubles the amount of shares floating around out there, which was approximately 921 million before today.
Just because insiders can sell doesn't mean they have to, and the lack of selling pressure today implies they think shares are too cheap. That's a positive side for us outsider investors who aren't privy to as much detail to Facebook's inner workings.
This lockup is the biggest but it's also not the last. There are two more lockup expirations on the horizon, so investors still have a couple of dates to circle on their Facebook event calendar. The next one is on Dec. 14 for roughly 155.9 million shares held by selling stockholders from the IPO (excluding Mark Zuckerberg).
http://www.fool.com/investing/gener...ends-the-lockup-expiration-bears-packing.aspx