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Views on News: Facebook COO dumps stock – what does this mean for Facebook’s stock value?


There have been people asking about it. Why do the writers at Dollars and Sense not cover stock-related topics?  Well, we don’t think it is appropriate to be promoting stock trading or stock investing (we will explain the differences to you in a separate article) on a whim. Jumping into a volatile stock market is as safe as skydiving after watching a video on YouTube. Nontheless, we do think it could be rather beneficial to bring to your attention some stock-related news and some commentary on it from time to time.

Yahoo! posted a Reuters report earlier today that Facebook Inc Chief Operating Officer (COO) Sheryl Sandberg had sold about $7.44 million worth of facebook stock that she own. What this essentially means is that she has choosen to reduce her ownership in Facebook.

Stocks of course can be traded on the stock exchange once a company goes public, as what Facebook did earlier this year. When Sandberg sold her stocks in the exchange, it basically equates into insider trading, a term used to describe stock trading when it is done by an employee from the company.

Some interesting things to note includes the fact that Sandberg is selling her stock at current trading price of $21.18.  Facebook stocks sold at $38 during its Initial Public Offering (IPO) back in May. In case you do not see the link, what this piece of news mean is that Sandberg, being a top management at Facebook, is satisfied with selling her stock at current trading price even though it represents a 45% discount to the price that Facebook was selling to investors during its IPO.

I have not analyze facebook financial statements so this is not going to be an article about how much I think Facebook stocks should be worth. What is undeniable however is the fact that the same stocks that Facebook management were valuing at $38 back in May are now worth $21.18, at least accordingly to Sandberg.

There have been many criticisms of Facebook and how the hype of its IPO will end up being a fad when people were to look back at it in the future.  I will refrain from commenting on it for now even though I am a self proclaim tech dummy who loves reading tech related business news (sell your stocks in RIM if there are still worth anything!).

Feel free to write in or comment to us on what you think about Facebook and its valuation. We are always happy to be hearing your views!

 

Royalty-free photo from Getty Images. Used with appreciation.

 

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