Facebook – who blinks first amongst shareholders with the imminent end of the lock up period…?

Facebook Braced for Further Downside

Tomorrow sees the end of the lock up period which means insiders are able to sell up to 270 million shares in the company. The question is will insiders sell some of their holding at the current market price of $20 per share or sit tight given that this is a hefty 50% discount to the initial flotation price?

If they do decide to sell there is no doubt to us that this will put severe downside pressure on the stock and likely pushing  it to new lows below the psychologically important $20 level. 

Looking at Groupon yesterday and Zygna in recent months, what would you do as a Facebook shareholder given stock for free? Succumb to mental anchoring of a fleeting price of $40 that you couldn’t take advantage of or still collect a life changing sum? I know what I’d do….

Facebook daily chart