Of all the challenges to Facebook's oh-so-challenged stock -- such as the company's struggle with the giant shift to mobile, and its slowdown of user growth in the U.S. -- one thing Wall Street watchers have been talking a lot about is the upcoming expiration of "lockups" in which insiders can start selling their stock.
And it begins tomorrow. Over the course of the next year, pre-IPO holders of Facebook stock will be able to start dumping their shares, with the potential of adding more than 2 billion shares to the market. In a game of supply and demand, that's never a good thing.
Here's the rundown of "lockup" dates soon to hit:
- August 16: 271 million shares
- October 15: 249 million shares
- November 14: 1.32 billion shares
- December 14: 49 million shares
- May 13, 2013: 47 million shares
Now, just because insiders can sell, it doesn't mean they will. While some big investors, like Fidelity, have sold the stock during its slide, others like George Soros have been buying. And the stock, still far from its offering price of $38, has been doing better the past week or so, closing up 4 percent today to close at $21.20.
Now, the wait begins: Will Peter Thiel, the first outside Facebook investor, start selling some of his 29 million shares? How about Reid Hoffman, another early backer? Or Mark Pincus, who's under fire for selling Zynga shares before they started tanking? What about Accel Partners, the first venture firm to invest in Facebook?
Here are some of the key insiders who, starting tomorrow, will be free to sell some shares. Noticeably absent is Mark Zuckerberg, who is restricted from selling more shares until the big November lockup -- which unleashes a potential 1.32 billion shares -- hits. (Shout-out to Tellis Demos of the Wall Street Journal for good summary of who's got what).