Apparently, the insiders are selling more than expected private shares of Facebook’s stock in the IPO this friday. And the insiders overall are selling a rather huge percent of their shares relative to other IPO’s. Of course none of the money for these increased share sells will go to the company to fuel future growth, but rather the funds will go directly to the insider’s bank accounts. Is that really a surprise? Facebook is expected to be the largest tech IPO in history and third largest of all time. I think this graph is very interesting. Of course the big boys like Goldman Sachs and the larger venture capital firms are dumping more than expected and the following commentary summarizes my thoughts in regards to this decision — “The basic question you have to ask is ‘Do you want to buy a company where all the insiders are heading for the door?'” said Tim Jenkinson, professor and head of the finance faculty at the Said Business School at the University of Oxford. “The logical inference here is these guys must think that the deal is going to be fully priced. Insiders increase sales of Facebook IPO Stock and who are the insiders cashing out
But, I also find it very interesting that the founder of LinkedIn and the founder of Zynga, Hoffman and Pincus, are also involved with the funding of Facebook and hold pre-IPO private shares. Both Pincus and Hoffman will be cashing in some of their private shares in the IPO siphoning around $416 million into their personal bank accounts. Hoffman is cashing out big time and Pincus just hauling in $4 million as he attempts to show some loyalty and belief in the future of Facebook which in turn determines the fate of his company Zynga. Interesting isn’t it? Are these guys all connected by some common interest? They are all founders of social media and networking companies and they are all becoming billionaires through the IPO process via this brand new industry. Strange. Can you see how insiders help themselves become billionaires? Can you see how insiders inflate the bubble and get rich before it pops? Connect the dots!