So, who is going to sell? A likely share hawker will be Accel Partners. The Silicon Valley VC took a punt on the social network when it was worth just $98m. Accel is one of Facebook’s largest shareholders and with a holding worth $3.3bn. After Accel comes Russian billionaire Yuri Milner, who may have sold off 40% of his stake at IPO but could still make a fair chunk of change.
Microsoft and Goldman Sachs, both of which held back from releasing their securities during the IPO, may also join the fray. Although, having paid top dollar to acquire their shares before the float, their returns may be rather thin. UBS will also be most eager to release its shares back into the wild. UBS has lost £227m on its Facebook investment, halving its overall profits. Can it recoup its losses this year?
Even the shareholders who are desperate to shake off their Facebook shackles will have to do so in a measured way. A flash sale will gut Facebook’s share price, which would be no good for anyone. Instead, smaller tranches of shares will be released from lock-up over several days, or sold at a pre-agreed price to other institutions.
But is this a bad time to sell up? From a valuation of $104bn on the first day of trading, Facebook's market cap has almost halved. It could be in its investors’ best interests to play the long game here. Plus, Facebook reports its next set of results in October. If it can plump up profit and growth, its valuation could surge up once more.
Of course, the opposite could also happen. Zuckerberg would do well to observe the cautionary tale of Groupon. The daily deals site’s latest results show pretty decent revenues - $568.3m for the quarter - compared with $392.6m in 2011. But exacting investors were expecting a $573m turnover, and are now punishing Groupon for falling short: shares fell more than 15% to $6.39. The stock is down about 60% so far this year.
But Facebook has some loyal friends. Mark Pincus, founder of games group Zynga, Sean Parker, the founder of Napster and former Facebook president, and LinkedIn founder Reid Hoffman are all likely to keep their holdings. Bono may also follow this route. The U2 frontman bought £56m-worth of shares three years ago through venture capital fund Elevation Partners. He resisted the temptation to cash in at the IPO, when he could have made around £940m. Will he stick or twist come Thursday?
And if Facebook comes through this week unscathed, when 238 million shares are free to be traded, will it survive the November exodus? In three months, 1.2 billion shares, many of them belonging to employees and venture capital firms, are released from their trading moratorium. If those end up selling at a substantial discount to those already traded, it could be a source of serious bad feeling at the firm. ‘This date becomes the greatest wildcard,’ says Brian Wieser of Wall Street research group Pivotal. Are you a Facebook employee planning to sell? Drop us a line.