I am reluctant to include a relatively new IPO stock in this group, because it’s very possible that company insiders could simply be taking some profits after the first run-up of Facebook (FB) stock. However, the large number of shares recently being sold in social media company make me suspicious, and I wonder if insiders think their stock is fully valued for the moment.
In the month of December, CEO Mark Zuckerberg sold 41,350,000 shares for $55.05, generating $2.28 billion from the sale! Meanwhile, Director Marc L. Andreessen sold 1,645,239 shares for $55.05, garnering a slick $90.57 million.
Andreessen had also sold shares in early November, taking in more than $59 million from that transaction. A number of other insiders also sold large numbers of shares, but they were automatic sales, making them less significant in terms of stock price performance.
So is Facebook a sell? Not necessarily, although it does still look a bit overextended for the short term, even after declining from $57.50 to the current price of $54.65. In fact, on any further drop to the 50-day moving average of $50.26, investors might do well to pick up some shares for the long term.