Public Companies Issue Too Much Employee Stock – LinkedIn, others

This June 13th article by Andrew Ross Sorkin of the NY Times lays out a problematic issue for LinkedIn – the issuance and reliance on stock for employee compensation.  With LinkedIn’s stock price languishing, employees didn’t necessarily see the value in the stock.  

One Unspoken Reason Behind the LinkedIn Sale

http://www.nytimes.com/2016/06/14/business/dealbook/linkedin-stock-based-compensation.html

 

Other companies that issue a lot of stock for employee compensation include Twitter and Square.   Both of these stocks are under pressure with speculators taking large short positions –  Twitter making the Barron’s list of the most shorted companies for the last few months. 

Square was downgraded in this recent post (May 24th 2016), with the analyst mention the shares coming out of lock up.   – http://www.barrons.com/articles/square-may-be-cornered-1464109671

“We believe the risks from last week’s lockup expiration are ahead, not behind the company. While the 180-day lockup expired last week, we believe it may take a few weeks for the impact of 250 million-plus shares coming to market.”

 

Twitter meanwhile, was number 23 on the list of the largest short positions of NYSE companies – Barrons, June 13, 2016 page M36. 

 

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