In the video below, Senior Technology Analyst Eric Bleeker looks at Facebook hitting new lows yesterday after a lock-up expiration led to about 270 million shares becoming tradeable yesterday. The problem, as Eric sees it, is that there's plenty of lock-up expirations ahead. On Nov. 14 alone, around 1.2 billion shares will once again have their lock-ups expire. Granted, many of those shares belong to insiders like Mark Zuckerberg, but the end result is more downward pressure on a stock where negativity seems to be feeding upon itself.
As Eric warns, many theses for investing in Facebook seem to rely on the assumption that the company will figure out a way to monetize their users. That could prove true, but in the meantime Eric says he'd rather stick with a proven model in the social media space like LinkedIn, as Facebook has plenty of negative pressures on it in the next six months.
After the world's most hyped IPO turned out to be a dud, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We've outlined them in our newest premium research report. There is a lot more to this company than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.
Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook and LinkedIn. Motley Fool newsletter services recommend Facebook and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.