Facebook investors stuck with huge float

Facebook doomed investors with huge float - John Shinal's Tech Investor - MarketWatch: "Facebook, the most high-profile tech stock of 2012, has somehow missed out on a sustained rally in tech stocks. What happened? The short answer is that common shareholders forgot how important the size of a new stock issue is. Facebook flooded the market with so many shares — 421 million on day one and now more than 2.4 billion — that the public markets are still digesting them a year later. It was easy to forget, of course, because all of the profit estimates that Wall Street analysts publish on Facebook, then and now, exclude the costs of stock-based compensation. While Wall Street does this for most tech companies — i.e., pretend that the largest chunk of compensation they pay to their workers simply doesn’t exist — in the case of Facebook it was a very large case of denial. . . ." (read more at link above)


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