Facebook Unlocks 800+ Million Shares Today

Facebook Unlocks 800+ Million SharesEver since Facebook went public in May, they have been getting a decent amount of flack from Wall Street and critics from all areas. It didn’t help that their IPO was plagued with an insider trading scandal, which tainted the whole process before and after it had already started.

For months after the IPO, Facebook’s performance and its stock have been constantly called into question. People were claiming the company would not recover, it’s stock was worthless, and there was no way it could take advantage of its one billion users. Wall Street wasn’t happy, and many people were upset about their stock purchases.

Recently, the stock has rebounded a bit. This is thanks to a wide range of new services on Facebook like gifts, promoted posts, and improved mobile advertising. The critics have held their tongues since, but they will be rather active today. But it won’t matter; I’ll get to that later.

Facebook and the Long-Term

Today, 804 million shares of Facebook stock unlock for trading. As Brian Womack for Bloomberg Businessweek writes today, this will be “the biggest increase in the number of shares free for trading” since the company went public.

I have little doubt that some Facebook cynics are watching this very closely, hoping for a massive sell-off indicating another failure for the company. But, like I mentioned above, the company has recently demonstrated it is working to improve its revenues and please Wall Street. One analyst in Brian’s article claims we’ll likely only see a “limited downside” to the shares becoming unlocked.

I tend to agree with this. Sure, some might sell, but for those people who view Facebook as a long-term investment, they aren’t going to sell when the company is only a few shares above its lowest point. The long-term is where Facebook is going to shine. It is for this reason that companies and small businesses need to keep paying attention to Facebook.

Perceptions of Facebook

Facebook is the first huge social network on Wall Street. It’s an experiment of sorts. This is why the stock receives so much attention from varied sources. As the company will be in the news quite a bit today (and probably tomorrow in regards to so many shares being unlocked), it had me thinking about why everyone cares about Facebook short-term and not long-term.

Facebook is not a platform that will make someone rich quick. No business is going to make tons of profits from this singular social media platform. Businesses’ interaction with social media needs to be part of a larger campaign or branding push to reap the benefits. Facebook is a long-term experiment that almost can’t fail – there are 1 billion users for crying out loud! All Facebook has to do is continue to monetize and improve its services, and the users and businesses will come.

Future of Facebook

Tomio Geron for Forbes has a great piece on Facebook’s future. He writes that “Facebook’s goal is to create a personalized digital newspaper through its News Feed” and monetize within that area. Integrate that with brands and their messages and it looks like a recipe for success.

As data storage, communication, and processing power increases, Facebook will be an even more efficient tool for presenting information to you – from friends, and from companies or services. As Tomio writes, thanks to technology, “Over the coming decade, everything is going to change.” That means Facebook and other tech companies will have “plenty of new opportunities in the future” to meaningfully communicate with consumers. That means more opportunity for businesses.

Your Future

Whether you’re a company that deals with numerous clients online or you’re a small business of your own, having an online presence, especially on social media like Facebook, is going to become increasingly important in the future. I don’t think that’s going to change any time soon. Make sure you’ve got a home on Facebook and other platforms.

Do you agree that Facebook’s long-term prospects look great?

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Patrick currently lives in Somerville, Massachusetts, where he is studying for a Master's Degree in Intercultural Relations. Upon graduation from Penn State in 2008, he spent two years overseas in Kyrgyzstan with the U.S. Peace Corps. While writing is currently his chosen way to put food on the table, he loves fitness and exercise, which he believes makes up for his avid computer gaming habit.

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