This was a tough pill to swallow for those who bought on Day One. But one approach that investors can use to help in a case like this is to buy in thirds. The idea is that you can get in on the stock with a small initial investment but have cash left to invest later. If the stock goes lower, you don't feel too bad, because you have money available and can add to your position at a better price.
If the stock starts to rise, as a shareholder, you can be comforted that you are capturing the gains. Let's assume you invested one-third of your available cash at the IPO and the remaining two-thirds split between buys at six months and at one year later. Buying in thirds doesn't always pay off monetarily, but it can help manage your temperament if the stock loses value. Red numbers in your portfolio are tough to look at.
Some investors might be tempted to sell, especially when numbers remain in the red for what seems like an eternity. Early Facebook shareholders who chose a buy-in-thirds approach not only would have achieved better results, but more importantly, they were more likely to hold their shares through the first 16 months of disappointing returns.
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Finance Home. Who's selling shares: Zuckerberg plans to sell But Zuckerberg won't be hanging on to his cash. Facebook said he will use the "substantial majority" of the windfall to cover the massive tax bill he'll be hit with , thanks to his plan to exercise a large stock-options grant that will increase his ownership stake in the company he founded. After the offering, Zuckerberg will still hold Venture capital firm Accel Partners, which is the largest shareholder outside of Zuckerberg, is selling 49 million shares in the offering.
That's about a quarter of its Facebook holdings. The Facebook IPO. Print Comment. What is an IPO? Did Apple save Dr. Dre and Jimmy Iovine just in time? How to make good TV for the web, according to Amazon.
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