More Facebook Stock Freed: Will Wall Street ‘Like’ It?

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ToBuyOrNot

Here we go again! 800 million additional shares of Facebook stock hit the market today as the third and largest stage of a five-part “lockup” process expires, freeing employees and investors to sell that stock.

A lockup period is a commonly used time-frame after an Initial Public Offering (IPO)—typically lasting 90 to 180 says—during which a given stock cannot be sold, in order to prevent a glut of a company’s shares from being dumped at once and quickly devaluing the company.

And so far, so good for the social media giant…

As this is being written, Facebook stock is sharply up on the day—bucking the expectations of many. After all, the first lockup expiration of 270 million shares back in August saw Facebook’s first major investor, Peter Thiel, and company co-founder Dustin Moskovitz sell big. The result of those sales and others was a 6% drop in stock price.

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Since Facebook’s IPO in May, stock value is roughly half its original $38 per share price

Many have worried that Facebook—while almost ubiquitous with modern life—would have difficulty ‘monetizing’ itself, which is to say, finally making some real money with advertising and expanded, profitable services.

The company was on everybody’s computer and (increasingly) handheld device, but so are free wallpapers and your compass app—the goal was to turn the platform from a glorified digital yearbook and hub for egg salad sandwich recipes into a legitimate cash cow.

So, is Facebook maturing? Investors are seeing a turn to profits, away from piffle

One of the reasons the company may be doing better in open trading—despite the sudden flood of 800 million shares—is because the media giant seems to be figuring out how to sell advertising space, particularly for mobile devices.

Mobile advertising has caused headaches for companies like Google, whose ad sales are up, generally, but still lagging in that critical and fast-growing handheld marketplace. When people are on the go, it’s tough to slow them down to pitch a product—especially a product they may have little use for.

It seems the key to a successful mobile advertising strategy, for Facebook and others, may be found in enhancing localization and better understanding consumer behavior. This ensures what’s being advertised actually sells and isn’t just viewed as more spam. And that goes for the global mobile marketplace as well, (pardon the rhyme).

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Language, culture, custom—all these are now being factored into the overarching marketing strategy. Facebook, of course, has copious records of what users follow, like, comment on, etc. However, it can be difficult to extrapolate what specific products to advertise to people merely from this kind of data—it doesn’t necessarily translate into what they will buy.

But, for the moment, the market seems to think the company will figure it out, so they’re bullish on the ‘Book, and that’s something shareholders definitely ‘Like’.

What do you think? Can Facebook successfully monetize itself, win back lost ground, and maintain momentum?