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Facebook Announces 5-For-1 Stock Split

Move baffles analysts

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For reasons that remain unknown – and are quite hard to guess at, for that matter – Facebook has split its private market stock.  More specifically, the company announced this afternoon that it’s conducting a 5-for-1 split.

If Facebook were going public, this would make it easier for the average investor to buy a share.  But rumors indicate the per-share price is only around $80, anyway, and Peter Thiel pretty much promised just this week that Facebook won’t go public before 2012.

Another theory, put forward to Reuters by a person supposedly familiar with the situation: "If you were going into Facebook, before they would have been able to say I’m going give you 10,000 restricted stock options, now they can say I’m going to give you 50,000; it sounds better.  It’s all optics."

Yet one has to assume that everybody capable of working at Facebook can multiply and divide, and is beyond such tricks as a result.

So the situation has left experts scratching their heads so far.  Paul Kedrosky described it as "surreal."  Felix Salmon echoed that and added the descriptor "very weird."

Feel free to leave you own theories in the comments section.

Facebook Announces 5-For-1 Stock Split
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  • http://www.sitebyjames.com/ James

    My guess is that they aren’t going public, but this makes it seem like they might, and that can ward off any bad sentiments until at least 2012.

  • Frank

    When you get that big, eventually the SEC will you to go public, just like Apple was forced. Plus Even after you know it’s really the same amount in stocks, larger numbers are always more appealing to a job applicant.

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