Other than AMT tax no Facebook employee can see the difference between the stock IPOing at $38 then falling to $18 and the stock IPOing and $18. Sure the is a lot more sturm und drang in one of the scenarios but at some point the price starts representing the market's view (right or wrong of the future). This is predicated on my assumption that Facebook's true value is closer to $4 (adjusting down to a P/E of around 20- I don't see a lot of growth potential despite claims like: http://techcrunch.com/2012/08/30/party-like-its-1990-some-ct... ). I don't short because for that to be profitable you need to be 1) more informed and more certain, 2) have some idea of the timing of the market coming around to your point of view.