August 16th For Facebook Insiders: Happy Facebook Unlock Up Day
Today is the day where insiders of Facebook (FB) which acquired shares prior to the IPO can start selling them.
Typically shares received of a private company are restricted from being sold until 6 months after the company goes public.
Usually these shares are held by true insiders of a company; their officers, directors and shareholders but in the case of Facebook there was a lot of VC money, angel investors and due to sites like SecondMarket.com which we talked about a couple of years ago, a lot of ordinary investors who acquired shares prior to the company going public.
While those who bought Facebook.com at the IPO of $38 are down some 40%, many of these people even those who bought shares through SecondMarket paid on a few bucks for their shares
In 2009 shares were trading in the 20′s, Earlier in 2010 shares were trading in the $30′s meaning anyone who bought shares at $20 or $30 paid something around $5-$6 per share and at $20 a share would more than triple there money by selling here. The last private reported sales of Facebook stock prior to the split were at $75, meaning those investor still could sell today (at yesterday’s clost) and make 25% on their investment.
On the other hand in the months leading up to the IPO shares were trading privately in the mid to high 30′s.
So today is unlock day, all those investors, plus true insiders can trade their shares for the 1st time.
Should be an interesting few days.