Back in 2012, I spent time contemplating taking part in Facebook’s (FB) initial public offering where I put in a conditional offer of around $40 per share. Due to significant pre-IPO demand, the IPO saw its price range increase from $28-$35 per share to $34-$38 per share. The IPO ended up pricing at the high end at $38 per share and due to oversubscription, I was allotted only 50 shares. I was initially going to flip the shares and not wait for the lockup period to expire BUT the entire IPO trading day fiasco (NASDAQ technical failures) changed all of that where it didn’t even have a chance to pop in open trading. By September 2012, it had dropped below $20 per share (and hit a low representing a nearly 50% loss).
Basically, the stock (for those who were allocated pre-IPO shares) remained underwater for over an year and I ended up holding this for the long term since I ended up dollar cost averaging by acquiring additional shares at that sub $20 per share range. And then I just let it all ride for whatever it was worth since at the time, it wasn’t clear just how well the company would be able to execute on its monetization schemes.
Fast forward to January 2018 and FB shares were trading at $190 per share (once again, holding for the long term ended up being a winning strategy where this represented around a 540% return on investment over a 5.5 year period). But I really wasn’t a fan of the company when it came to their corporate responsibilities (especially with how the platform was being weaponized to disseminate misinformation). That fully came to a head with the Cambridge Analytica scandal. Despite these misgivings, I noted my rationale back then for why I did not see any sense at the time to begin divesting myself of FB shares. And so I just left it in my portfolio.
Due to a family emergency throughout the latter part of 2018 and through the end of 2019, a lot of things (including tracking my portfolio) weren’t even on my radar (also why I’ve rarely blogged in the past few years). Which is where I am today (with having more time to digest the information that I haven’t been able to really get into for an year). Facebook as a social media platform has a significant worldwide reach to where the company has ethical and moral responsibilities to society in general. Self-regulating has remained paltry at best; the platform continues being misused as a weapon for misinformation and Zuckerberg refuses to really do anything about it (the same goes for Dorsey over at Twitter BUT I wisely did not even bother ever considering investing in them). Basically, I really don’t care how much potential upside FB shares have going forward because I can no longer tolerate being invested in a company that doesn’t really give a damn about their obligations to our society when outside foreign interference is playing a role with weaponizing the Facebook platform to spread their misinformation.
These IPO shares were class A shares (non-voting shares) since Zuckerberg set things up this way (where insiders and himself held the bulk of preferred shares where he will always control a majority interest in the company until he divests himself of those preferred shares). This leaves most FB shareholders powerless when it comes to concerns like this. Watching what has been happening in the US in recent months (especially with this COVID-19 pandemic) has made this decision to dump my FB shares a really easy one. Zuckerberg cares more about the revenue than about all of the negative impacts from these ongoing astroturfing and misinformation campaigns that are taking place on Facebook. Remaining invested in a company like this just doesn’t feel right so I’m getting out. I’m also earmarking the profits I made for donating to a worthy cause in the future.
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