The reason Facebook went down is the usual immediate post IPO sell-off when a bunch of people that got into the IPO sell their shares immediately to make some quick profit.
Is this one correct, though? I recall that insiders have selling restrictions for 180 days after the IPO date.
Lock-up periods only apply to those holding a majority of stock (i.e., Zuckerberg), or to insiders who held a significant portion of stock prior to the filing of the IPO. Company employees typically fall into this category, too, even if their holdings aren't enormous, because they're insiders.
The lock-up doesn't necessarily apply to people who got in at the IPO, such as during the roadshow period. Also pretty sure the lock-up doesn't apply to people who bought private shares in secondary markets, such as the Goldman clients who bought in when Goldman offered private stock about 6 months ago.
I was an engineer at HomeAway during last year's IPO, and all employees were under a 6-month lockup period (during which time you can not sell stock, or enter into any sort of agreement with a third party regarding stock options).
As an employee, therefore, the IPO event itself is not too significant. Unless you have $1 options (or already own stock at a very favourable price), you can't bank on a return due to the uncertainty of the lockup period. Also, the end of the lockup period itself (although completely anticipated by the market) will likely be unfavourable for the stock price as selling employees introduce more supply.
Are you allowed to sell the market (S&P say, using a 6 months futures contract) so that your only exposure is to the Homeway-S&P differential, not to the market in general?
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The reason Facebook went down is the usual immediate post IPO sell-off when a bunch of people that got into the IPO sell their shares immediately to make some quick profit.
Is this one correct, though? I recall that insiders have selling restrictions for 180 days after the IPO date.
Lock-up periods only apply to those holding a majority of stock (i.e., Zuckerberg), or to insiders who held a significant portion of stock prior to the filing of the IPO. Company employees typically fall into this category, too, even if their holdings aren't enormous, because they're insiders.
The lock-up doesn't necessarily apply to people who got in at the IPO, such as during the roadshow period. Also pretty sure the lock-up doesn't apply to people who bought private shares in secondary markets, such as the Goldman clients who bought in when Goldman offered private stock about 6 months ago.
I was an engineer at HomeAway during last year's IPO, and all employees were under a 6-month lockup period (during which time you can not sell stock, or enter into any sort of agreement with a third party regarding stock options).
As an employee, therefore, the IPO event itself is not too significant. Unless you have $1 options (or already own stock at a very favourable price), you can't bank on a return due to the uncertainty of the lockup period. Also, the end of the lockup period itself (although completely anticipated by the market) will likely be unfavourable for the stock price as selling employees introduce more supply.
Are you allowed to sell the market (S&P say, using a 6 months futures contract) so that your only exposure is to the Homeway-S&P differential, not to the market in general?