Facebook insiders “un-friending” their own stock?

12th July 2013 No Comments

financial crisisFacebook has had a troubled history after its initial public offering last year, which was followed by a precipitous dive that left the stock down over 40% from its original value just two months after it became available to the public.

Since then, Facebook (FB) has been able to bounce back fairly nicely, even climbing briefly back up to its original asking price in June. Of course, that didn’t stick and to this day, Facebook is fighting to stay at about 20% less than its initial public offering price.

Good news would be very welcome, then, but it isn’t coming. In fact, now we’re finding out that even Facebook insiders no longer “like” the stock, and some of them are selling their own shares and turning heads in the process.

In particular, chief operating officer Sheryl Sandberg has made some sales, ditching nearly 170,000 shares recently. She also departed with about 7,000 shares that were in her family trust. The information was disclosed from a Securities and Exchange Commission filing.

Now, Sandberg and others inside the company still account for plenty of Facebook’s shares, but there is no denying that the sales send a negative message to investors. If Facebook executives were as confident in the company as they claim to be, wouldn’t they be buying shares instead of selling them?

The concern with Facebook has nothing to do with its staying power, as no other platform is even close to competing with Facebook for social media superiority. Only Google appears to have the resources to even attempt to steal away some of Facebook’s billion-plus users, and Google Plus hasn’t exactly taken the world by storm.

The problem, of course, is that Facebook is free to use and supposedly always will be. There have been some ways to monetize members with certain apps and messaging options, but Facebook’s income is still dwarfed by its huge user base. If Facebook can ever figure out a way to really monetize its vast user base, watch out. Until then, be careful.

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