Zuckerberg Drops Out of Top 10 Tech Billionaires

Facebook CEO Mark Zuckerberg had a tough week: His sister went to work for his top competitor, Google, his company’s stock price hit a new low and now he has dropped out of the top 10 tech billionaires list.
Zuckerberg’s fortune fell by $423 million on Thursday to $10.2 billion. That puts him $400 million behind James Goodnight, the co-founder of SAS Institute, the new number 10 on the $21 billion when the company went public in May. Zuckerberg owns 503.6 million shares of his company including 60 million options with an exercise price of $.06 a share. He also has $150 million in cash and other liquid assets, Bloomberg reports.
Facebook’s stock price on Thursday was down 47% from its $38 debut. On Friday morning, however, the stock was up about 2%.

Facebook Is Getting Crushed -- Down 4%

Facebook can't buy a break.
The stock is off 4% this morning after it got a mixed report from Bernstein analyst Carlos Kirjner.
Kirjner raised his rating on Facebook to Market Perform from Underperform, reports Eric Savitz at Forbes. He has a $23 price target on the stock.
While that all sounds good, he also basically tells investors he only thinks the stock is really worth $19. The other $4 is what Facebook might do some day that will be awesome:

“We believe that  Facebook is worth $19/share (10 times estimated 2014 EBITDA plus cash) valued just as a display advertising business gaining market share due to its fundamental competitive advantages based on scale, user data and identity ... These $19/share do not assume upside from its social advertising capabilities and do not give Facebook any credit for upside from yet-to-be-defined businesses based on its distinctive assets, such as its social graph. Because these ‘upside’ opportunities are still highly uncertain, we value them at $4/share based on our sizing of such upside opportunities and our judgment of the probabilities they will come through, leading us to our $23/share valuation."

His note only gets more negative from there:

"The decline in European CPMs [in the June quarter], attributed by management to poor macro environment, suggests that Internet advertisers in Europe are not yet convinced of Facebook’s high ROI ... The fact that Facebook’s revenue trajectory and key metrics are already affected this heavily and this early by external drivers such as seasonality and macro give us pause. To us, this suggests that either the ROI on Facebook  advertising is just not that attractive, or the company has a long and arduous path to making it transparent to advertisers."

And finally ...

"As it has been well known, over 211 million shares will be added to Facebook’s current float of 484 million shares in August, an increase of nearly 40%, up to 355 million shares will be added to the float in October (an 73% increase versus the current float), and 1,339 million in November (an 276% increase compared to the current float)... While these are well known facts and should (in theory) be already reflected in the stock price, history suggests that there is a good chance of transient pressure on the stock price as liquidity increases abruptly. We would see a buying opportunity if FB were to trade around or below $19/share."

Facebook founder loses $3 Billion in 48 hours

Happier times: Zuckerberg on May 18, after ringing the Nasdaq bell on IPO day

(Credit: Facebook)

For the hordes of investors large and small who bought into hype around Facebook's IPO -- heck, even for those who snapped up shares a two days ago -- this will offer little comfort. But in the last two days of trading, the assault on Facebook's stock has shaved a few billion dollars off the Facebook's famously rich founder's net worth.
More specifically, since the close of trading on Wednesday, Mark Zuckerberg has lost almost $3 billion, at least on paper. (His total stake is still worth about $11.8 billion, a far cry from the $19 billion he held at the IPO price).
As we all know, Facebook's stock has been struggling since its botched IPO on May 18. Ever since gong public at $38 dollars a share -- and briefly reaching $45 on opening day -- it's been a bumpy ride down. The last two days have been particularly brutal. Fisrt, Zynga, which is tied at the virtual hip to Facebook, reported dreadful earnings, spooking Facebook investors. And then yesterday, Facebook reported its quarterly earnings, which left the Street unconvinced that company is moving fast enough to turn those 955 million users into big dollars.
Zuckerberg has sold some of his stock, which the company said was necessary for him to pay his taxes. Regardless of the reason, just after the IPO, he took some profits at a price that others would envy. He sold 30.2 million shares at $37.58 a share, netting him more than $1.1 billion.
As for the future, who knows. This is the stock market, after all, and past performance is no guide for future performance. Yet there are some key dates that Wall Street is worried about. Those are when the so-called lockup periods expire and more insiders can sell their shares, which doesn't seem so far-fetched for those who got them at, say, $1 a share.
One of those dates comes on August 15, when, 90 days after the IPO, 268 million shares held by stockholders other than Zuckerberg become available for sale. But the date that causes the most concern is November 13, when 1.24 billion shares will become available for sale.
It's well understood -- and Zuck and his team said as much on yesterday's conference call -- that Zuckerberg isn't going to cater to the short-term interests of Wall Street. So he might not care that much about the following painful stock chart:

Facebook's stock since going public May 18