Facebook Inc (NASDAQ:FB)’s board of directors have exercised their restricted stock units, as disclosed in Form 4 filings with the Securities and Exchange Commission. Marc Andreessen, Erskine Bowles, Susan Desmond-Hellmann, Donald Graham, Reed Hastings, and Peter Thiel each exercised 7,742 RSUs leaving them with the same number of class-A common stock, reports David Cohen for AllFacebook.
Facebook’s restricted stock units option
Since all four exercised the same options it’s reasonable to guess they made the decision together, and if they sell the common stocks right now they will net a little under $400,000. Investors like to watch executive trading activity to see if people inside are losing confidence, but this trade is too small to cause such concerns. Regardless of whether they were just doing routine trades or they decided to dip into their stock options while Facebook Inc (NASDAQ:FB) is riding high, other investors are unlikely to be concerned.
Facebook Inc (NASDAQ:FB) has had a great year as the U.S. stock markets in general have rallied and investors have warmed to tech companies like Facebook, Twitter, and (although not strictly a tech firm) Tesla Motors Inc (NASDAQ:TSLA). Twitter Inc (NYSE:TWTR) just had the most anticipated IPO of the year, which went off without a hitch, and Tesla is trading at a multiple of about 100x. Many people think that valuations are too high right now, and Facebook has been prone to price fluctuations in the past and likely will be again. Even people who think the company is going to have a strong future may try to time profit-taking for one of the stock’s high points.
Facebook’s main challenges
Facebook Inc (NASDAQ:FB)’s main challenge this year has been convincing investors that it can manage the transition to a digital world dominated by smartphones and tablets instead of people sitting at their computers. Despite some missteps early on, including a Home app that was badly received, Facebook has managed to improve its mobile ad revenues and increase its mobile presence. Its most recent earnings report was a mild disappointment for some investors because Facebook said that it won’t increase the frequency of ads that it shows to users, striking a balance between revenue and annoying its user base.