Watch Out Facebook Inc (FB) Investors, Lock-Up of 750M Shares on 11/14


Cantor Fitzgerald is out with a new report today on Facebook Inc (NASDAQ:FB). Although the firm is positive on the stock (as are almost all sell-side firms on every stock), they note some scary events ahead for investors. Lock up expirations are coming.

Watch Out Facebook Inc (FB) Investors, Lock-Up of 750M Shares on 11/14

Wednesday 11/14 will mark the lock-up expiration for approximately 749 million outstanding shares, and 28 million shares underlying pre-2011 RSUs not held by current employees. While this lock-up has been widely expected, the sheer volume of shares coming off of it (~30% of shares outstanding) could dramatically increase volatility and pressure Facebook Inc (NASDAQ:FB) shares.

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Here is a recap and calendar of lock-ups:

Date Available for Sale into Public Market Number of Shares of Common Stock

  • October 29, 2012 Approximately 124 million shares underlying net-settled Pre- 2011 RSUs held by then-current employees as of October 15, 2012 and approximately 55 million outstanding shares and approximately 55 million shares subject to stock options held
  • by then-current employees as of October 15, 2012 other than Mark Zuckerberg
  • November 14, 2012 Approximately 749 million outstanding shares and approximately 28 million shares underlying Pre-2011 RSUs
  • not held by then-current employees as of October 15, 2012
  • December 14, 2012 Approximately 156 million shares held by the selling stockholders in our IPO other than Mark Zuckerberg
  • May 18, 2013 Approximately 47 million shares held by Group Limited and DST Global Limited and their respective affiliates
In more bad news for Facebook Inc (NASDAQ:FB):

October U.S. website traffic data (PC-based) out of comScore was mixed. October unique visitors to (+59.2% Y/Y), Shutterfly (+24.3% Y/Y), and Priceline (+17.0% Y/Y) showed strength, while Expedia (-18.9% Y/Y), VistaPrint (-11.0% Y/Y), and Facebook (-10.2% Y/Y) were lower. Facebook Inc (NASDAQ:FB)’s traffic is being influenced by a continued shift to mobile usage/engagement. October total site visits for (+124.7% Y/Y), Shutterfly (+36.6% Y/Y), and Amazon (+35.5% Y/Y) led the pack, while Expedia (-21.9% Y/Y), Yahoo! (-19.6% Y/Y), and ValueClick (-16.6% Y/Y) came in on the lower end.

And finally, some better Facebook Inc (NASDAQ:FB) news:

Facebook Inc (NASDAQ:FB) rescheduled a Gifts Press Event in NYC to November 15th, according to the WSJ’s All Things Digital. This event was originally planned for November 1st, but was cancelled due to Hurricane Sandy. In our note , Cantor Fitzgerald’s analysis suggested that a 10% penetration of MAUs in NA, an average spend of $50/yr., and a 10% revenue-share would yield nearly $100M of annualized revenue. They believe this is a meaningful pivot into e-commerce, so they think it is important for investors to  be tuning into the event.

Disclosure: No position

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