facebook stock forecast
The end of the lockup period (used to reduce trading volatility immediately after an IPO) will kick off with up to 271 million shares flooding the market on the sell-side. More shares will become available over the next few months, compared with less than 500 million currently authorized for trading.
Investors who got in early and paid a mere pittance for the stock may race to cash in despite Facebook's steady decline since its legendary May 18 initial public offering at $38 a share. Since the fabled IPO, which morphed into a trading fiasco, shares have lost some 40% of their value.
The flood of shares ready to be unlocked is off-putting for some potential buyers.
"It's one of the No. 1 issues on investor's minds right now," Herman Leung of Susquehanna International Group told Bloomberg News. "Even the investors that I talk to who want to buy the stock and like the company are not sure if they can stomach the lockups."
While the event won't garner the same kind of fanfare Facebook enjoyed leading up to its IPO, the projected numbers are already attracting a great deal of negative attention, and Facebook stock has fallen in the midst of some dreary expectations.
According to data from Bloomberg News, Facebook is forecast to report revenue of $1.16 billion, while profit is expected to have fallen 10% to 11 cents a share amid a slowdown in sales. The whisper number is for earnings of 12 cents a share.
Predictions for the company have been slashed in recent weeks as concerns of a slowdown in sales and user defections have increased.
Those cuts have weighed on Facebook stock. Shares on Tuesday slipped for the sixth consecutive day, eked out a small gain Wednesday, and were lower again today (Thursday).
"People are concerned about the growth profile. More risk is being reflected in the lower stock price," Benjamin Schachter, an analyst at Macquarie Securities USA Inc., told Bloomberg.