With Facebook employees able to liquidate stock in a few short weeks, there will be continued pressure. They have learned a very important lesson from their neighbors at ZNGA, namely that it might be wise to sell into the decline. While ZNGA may already have bottomed out, further decline in Facebook will limit the ZNGA bounce. Even though we have seen a quick ten point decline in Facebook, it remains a high probability short. Sub $2- ZNGA is by no means out of the cards, but the odds are much better for a Facebook short position. Meanwhile, ZNGA litigation gathers steam.
Facebook at $6- is certainly possible, but we would need a string of crap quarterly earnings. It is amazing (not surprising)how quickly Facebook declined thus far in light of all the hype and p.r. surrounding the ipo. Most shorts are day traders in their mentality, lacking patience, and easily disturbed by the inevitable bounces on the ride to the basement. You just sit this one out, the exact strategy used with ZNGA. An interesting observation is how all the Wall Street experts and analysts were rooting for this rubbish, both FB and ZNGA. What do they really know?