As Facebook insiders get ready to flood the market with their shares, Netflix (NASDAQ:NFLX) CEO Hastings spent $1 million and bought 47,846 shares of Facebook at $21.03 a share. Those are the only Facebook stock he owns. Reed Hastings has served as a member of Facebook board of directors since June 2011. He is the CEO and Chairman of Netflix and also serves on the board of Microsoft (NASDAQ:MSFT).
Facebook shares has lost more than 40% since its IPO at $38. Many investors who bought into the shares after the IPO are angry at Facebook insiders and earlier investors. To be fair, no one forced these investors to buy Facebook shares. Many of them fall into love with Facebook and then bought the shares, although most of them have probably never bought anything through the advertisement on Facebook.
Facebook shares were priced at unsustainable levels at the IPO. The company has yet to find a way to monetize from its user base as the growth slows down. Two and half months after the IPO, Facebook’s lockup period will start to expire. On Aug. 15, 268 million shares will hit the market. On Nov. 14, another 1.3 billion shares will become available. With all these shares flood to the market, it is interesting to see how Facebook shares will fare.
Reed Hastings has been constantly selling Netflix shares over the past few years when the stock was trading up all the way to almost $300 a share. He stopped selling the shares when the stock collapsed to $111 a share. Today Netflix is traded at around $57.
Does Reed Hastings’ purchase indicate that he has confidence in Facebook stock? Or at least he has more confidence in Facebook stock than in Netflix? Above all, he never bought any Netflix stock after the stock price collapsed.
These are the details of Reed Hastings’ trades with Facebook and Netflix.
- CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
- Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
- Double Buys:: Companies that both Gurus and Insiders are buying
- Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.