Netflix’s CEO, Reed Hastings recently purchased $1 million worth of shares of Facebook. Hastings purchased 47,800 shares at $21.03. He is on Facebook’s board, which he joined in June 2011.
So I have to wonder, does Hastings believe the company is undervalued at this point or is he just trying to show faith in the company to keep shareholders and executives happy.
I’m curious to know what he truly believes based on the fact that I’m the not so proud owner of 1,300 shares at a buy in price of $40.00.
Friday morning when the stock went public I saw things weren’t going the direction I wanted for the price. So I tried to cancel the order. However, my broker couldn’t cancel because she didn’t know if the trade had gone through. By the end of the day I found out we did buy and all I could do was hope the stock would rise over the next few weeks and months.
Since then, the stock has dropped to a low of $19.82 from it’s opening of $38.00. Currently it’s priced around $22.00, a 51% drop from it’s high.
Although I haven’t started a multi-billion dollar company or sit on the board for a public company, I do have some advice for Hastings and Facebook executives. All based on my personal experience of starting a successful small company that eventually was acquired.
First, I found when I focused on one thing in the business, the more profitable the business was. As an entrepreneur it’s easy to be distracted, as that’s just our nature. While running a company like Facebook, I’m sure there are even more distractions of people trying to tell you what to do and how to do it. Focus was the key for me.
Second, when everyone in the company was on the same page of what that one thing I was focused on and they performed their tasks to move in the same direction, once again we were more profitable. It’s a bit like the eight person rowing team in the Olympics. Even with the most talented team in the world sitting in the boat, the boat wouldn’t go anywhere if everyone weren’t rowing in the same direction.
Last, rewarding success was the fun part. When the company reached the goal we set because we were focused, had a talented team and everyone was in alignment with the direction we were moving, rewards came. For us, it was a traditional Christmas party where we bought gifts for everyone in the company and did a bit of a white-elephant gift exchange with them. The employee who had been with the company the longest opened the gift last but got to choose from all over gifts so they were able to get whatever they wanted.
For Christmas this year, I’m just hoping that Hastings is right on his gamble and we all are rewarded next year.