Shares of Facebook (FB) are coming under pressure … as the stock receives a raft of cuts in price target, with BMO Capital, Stifel Nicolaus, and Merrill Lynch all offering targets in a range of $23 to as low as $15.
Merrill Lynch’s Justin Post, cutting his target to $23 from $35, writes “Facebook has multiple lock-up expirations over the next year (see Table 1) and recent selling activity on the August lock-up suggests to us the risk of future selling pressure. The biggest lock up date is 11/14 (40% of shares eligible for sale), and we wouldn’t expect stock to see buying momentum until December.”
Again, while I do think Facebook will be a good stock in the long run (and Zynga for that matter — remember don’t count out the grasshopper), right now it is just very painful. The short interest and so many shares flooding the market means their share prices will stay down. As Post says above, you’re better off waiting for better prices until at least December. If not next summer.