News recently hit the web about Facebook setting off a chain of events that will split their stock forward 5-1and set up a $2,500 fee for any current stockholders who wish to sell their shares.
On the surface this decision looks like a simple one - meant for private eyes - and not really taken seriously by the public. What we see are indicators. . . major indicators.
1) The $2,500 fee for the transference of private company stock, as well as the 5-1 split, is meant to lower the company’s stock valuation. This decision is so that when Facebook does go public, their shares will be accessible to anyone, thus enabling their price to rise even further with the more investors that will buy and sell ownership of the company.
On the surface this decision looks like a simple one - meant for private eyes - and not really taken seriously by the public. What we see are indicators. . . major indicators.
1) The $2,500 fee for the transference of private company stock, as well as the 5-1 split, is meant to lower the company’s stock valuation. This decision is so that when Facebook does go public, their shares will be accessible to anyone, thus enabling their price to rise even further with the more investors that will buy and sell ownership of the company.
2) The transference fee informs the company's CEO and other higher-ups how much the shares are worth to outsiders. If someone is willing to pay $2,500 extra on top of of the already high valued stock, they can see that this investor expecting to make a return of at least the purchase price, plus the extra fee.
You can see that even the smallest things can give away a large aspect of a company's internal strategy or future earning potential. A number of articles detail news in the tech industry, but we are not a company that is biased in towards technology related stocks...we just see it as an indicator of future trends in the global economy. More on this later.
