Facebook Inc. (NASDAQ:FB) has certainly been taking its share of body blows with its stock since the less-than-dynamic IPO in the spring. Much of the downside, though, can be blamed on locked-up shares being released into the market, though a couple of those releases have occurred. However, this week is a lock-up date that is significant for more than a symbolic reason – it is one of the largest lock-ups that will be released.
And as the law of supply and demand goes, as more shares are released into the market (supply), prices tend to go down to try to increase demand for those shares. And with Facebook Inc. (NASDAQ:FB) already about 50 percent of its IPO price, and about 5 percent of the shares being released into the marketplace this week, where this stock may go is not clear. But it may not look good.
This week, about 225 million Facebook Inc. (NASDAQ:FB) shares will be released and available to be traded. Further stock dilution in the market has generally not been positive for the company in terms of share price, and a recent article suggests that seems to be a similar expectation for Facebook Inc. (NASDAQ:FB). However, the writer mentions that he believes that the stock just might be undervalued at this point, and suggests that investors might find some good value next week, after the lockup is released. However, it is acknowledged that Facebook Inc. (NASDAQ:FB) is still having issues with revenue streams and there is some skepticism about the success of such options as Sponsored Posts and Facebook Gifts and how many of the 1 billion users of the social netwrork will actually dole out money for these types of services on a consistent basis.
And that skepticism just might hover over the stock until Facebook Inc. (NASDAQ:FB) successfully answers the questions of revenue and mobile advertising. Investors like billionaire fund manager George Soros of Soros Fund Management will certainly be looking for some definitive answers.