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Facebook lock-up schedule.

August 31, 2012

Pointless for you to read this posting unless you have read all my postings on FB before and understood my concepts and abbreviations. Yah, I know, I’ve being told many times that my posts are interesting to read, but entertainment isn’t my goal. I am a caring person. My goal after retiring to a beautiful mansion in the forest is to feed your mind with real and uncomplicated financial stuff  you can’t get nowhere else on the Internet (or in books). In these poorly functioning classical economics times I want to make a behavioural difference in the lives of motivated people. I get no satisfaction from disseminating ordinary information to ordinary folks. It’s a useless use of my time!

FB lock-up schedule means that Zuckerberg is projecting that the releasing 2 billion lock-up shares by May, 2013 will not dampen FB’s stock price below $15 per share. This estimate shows his self-confidence that his company’s earnings of 8-9 billion per year will reveal a greenback face in 3-4 years (sharp analysts – there are a few – are already sensing the jump to $41 per share).

My permanent readers know my thinking and the use of capital letters. If FB’s 270 million share released in August 2012 dampened the stock price by 7% you’d expect the 243 million release in October to dampen it by additional 3%, the 1,323 million in November to dampen it by 4% and the two  small share releases in December 2012 and May 2013 to dampen it further by about 2%. The total dampening will then be a share price between $15 and $17. I want you to become a smart reader of my blog. My permanent readers are smart. They can teach regular folks. They know that my analysis is based on Dr. Kahneman’s Heuristic System 1, and even then there are hidden variables such as a different future earning per share and public relations campaigns (EPS-PR) that can reduce the share price to $10 or keep  it at $20. And, the time to wait for a nice CG may extend from 3-4 years to 4-6 years. One thing I know without risk is that FB is a baby GG (golden goose) that one day will lay pecuniary eggs in my nest!

2 Comments leave one →
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