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Facebook, Inc. (FB) Message Board

  • wwwhead222 wwwhead222 Dec 5, 2012 11:45 AM Flag

    Speculator front-run on index inclusion

    Unless FB can get back over $28 today, it makes me think that a lot of this "news" on its inclusion in the N-100 index was already baked in the run-up from $19.50 to $28. Now you have the speculators that anticipated the index news cashing out their profits before the next lockup expiration (next week).

    I suspect that many employees sitting on paper profits will want to realize those gains now (bird in the hand), especially knowing that capital gains rates are going up next year. It will be interesting to see if additional index fund purchases can counter those sales.

    I suspect there's also a lot of momentup players that will pause purchases once FB isn't going up $2 per week due to the speculator front-run of the index news. I guess this thing can go either way, which makes me uncertain in the near-term. Given how quickly technology and competition moves, it's hard to be certain in the long term, too. That's especially true given market saturation of the developed countries. By the time China let's FB play there, they'll have to enter via a partnership/acquisition with one of the existing Chinese companies.

    WIth all this uncertainty, what the heck am I doing investing in this stock right now????

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