
Facebook Shares Get Sliced Into Derivatives as Value Surges - joelhaus
http://www.businessweek.com/news/2010-11-23/facebook-shares-get-sliced-into-derivatives-as-value-surges.html
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joelhaus
Someone is betting big against Facebook:

 _[...]after talking to institutional investors who were having trouble
finding a way to invest in Facebook. He expects to raise at least $100 million
for his Facebook-specific fund._

 _By creating derivatives of the stock, the investment firms are helping
Facebook keep its shareholder count at 499 or less, the maximum number a
company can have before it has to disclose results to the public._

Something like this:

    
    
      Present Value
      $100mm = capital
      $20    = current price per share
      5mm    = # of derivitave shares held
      -----------------------------------------------------
      Future Value
      Long Pos.  = (5mm * expected price per share)
      Short Pos. = capital - (5mm * expected price per share) + fees

