It wasn’t six months after the IPO, but I know a couple of guys who couldn’t sell stock for weeks, which put one of them into a very serious bind and heavily damaged his credit rating. He was trying to buy a house and was going to use the money from the stock for the down payment. He spent several more years as a renter because of it. Of course, he is in much better shape today because he eventually sold all of the stock he owned and put the proceeds in CDs and T-bills.
I don’t wish the guys in Facebook ill, I just don’t have any trust in the stock market and know the limitations.
]]>I’ve never run into the case of someone not being able to sell stock in a profitable publicly traded company 6 months after IPO. They always were able to sell it. Maybe not for the price they wanted, but (shrug) so it goes.
]]>We have been riding the edge of deflation for a while, and there are a lot of people who aren’t buying anything. If there are no buyers, even gold is worthless. This is the situation in some real estate markets – everyone with money is waiting for a lower price.
These guys may all become millionaires and billionaires, but they aren’t at the moment, and the indications are that the market price on the stock is definitely below the opening price. The underwriters may take a bath on this IPO.
My point is that people should not start extending them credit until they actually have some cash, rather than just the possibility of cash.
With what is happening in Europe, a slip back into an ‘official’ recession is a very real possibility in the US.
I know I’m being pessimistic, but I’ve seen a lot of ‘downturns’ in my time on the planet, and I have no confidence the ability of the people currently in charge to do the correct things.
Full disclosure: I’m not on Facebook; have no intention of ever being on Facebook; have no interest in the idea of Facebook. The closest I have come is some links to coverage of some of the sporting events I follow.
]]>And six months from now, the only way Facebook will be below $1/share will be if Facebook goes bankrupt or the entire stock market collapses. Not happenin’. And as long as Facebook is above $1/share, Zuke and pals make money when they sell their exercised options, LOTS of money, because I can also guarantee you that the options they got back when Facebook was a startup were for some ridiculously low price like 1.67 cents per share.
]]>I know a lot of people with that same type of ‘wallpaper’, Badtux. It ain’t real unless it is in cash or actual physical assets.
With stock, a house, a car, etc. it is only worth what someone is willing to pay for it when you want to sell it. Who knows if there will be a market for the stock in 6 months? They can now sell it as it is listed, but if things don’t start turning around, nothing much may be selling in 6 months.
]]>Yeah, I got enough worthless stock option sheets to paper my wall with, courtesy of working for startups since 1998. And your point is? ;).
– Badtux the Serial Startup Penguin
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