Friday, August 17, 2012

Post Lock-Up Facebook Stocks: Still Economically Viable?

With its stock price now about 50% of what it was during its initial May 18, 2012 IPO, does Facebook still represent an economically viable part of one’s stock portfolio? 

By: Ringo Bones 

As the post lock-up period trading of Facebook stocks now values it at a bit above 50% of its May 18, 2012 initial IPO flotation period, it seems that the famed social media network has been “unfriended” by corporate bigwigs, directors and seasoned stock market investors as the 90-day lock-up period expired back in August 16, 2012. But will everyone taken by the irrational exuberance of Facebook’s May 18, 2012 IPO be dumping their stocks like its going out of fashion? 

To the uninitiated in stock-market investing, lock-up period is the length of time that prevents shareholders unloading their stocks to the market so close to the IPO floatation period. Lock-up period laws are primarily designed to prevent the stock market from being swamped with pre-owned shares whose value may or may not rise by the end of the lock-up period. 

At present, Facebook still really has a lot going for it because over 7% of the world’s population are using / accessing their Facebook accounts via mobile devices and/or mobile smart-phones. Despite share prices on the decline, the lucrative mobile adverts on Facebook are still economically viable for the famed social media network. But seasoned investors’ concerns over the earning potential of Facebook justifying its 38 US dollar a share IPO will probably occupy their minds. After all, it is not that long ago that everyone was taken for a ride of the irrational exuberance of the dot com boom of the late 1990s. 

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