Zuckerberg Won't Sell Facebook Shares for the Next Year
Facebook appears to be trying to lift the gloom surrounding its stock price.
In an SEC filing Tuesday, the company announced that Facebook CEO (and primary shareholder) Mark Zuckerberg would not sell any of his holdings for the next year. In addition, the company said directors Marc Andreessen and Donald Graham "have no present intention to sell any shares of our common stock" other than to satisfy tax obligations.
Facebook also announced a rule change that will let employees sell their shares sooner--a move that actually increases availability of the stock--as well as a share withholding plan that effectively serves as a stock buyback to support the stock price, The New York Times explains.
The moves had a modest positive impact on Facebook shares, which had dipped to $17.73 a share Tuesday evening--less than half of their initial $38 price. By midday Wednesday, Facebook stock was trading up more than 4% for the day.
Yet some analysts are still skeptical about Facebook’s financial future.
"While it’s great that Mark isn’t selling, you’re still saddled with significant selling pressure on the stock,” Richard Greenfield, an analyst with BTIG Research, told the Times. "The lock-up monkey on their back isn’t going away because Mark isn’t selling."
Other analysts pointed out that the moves were a mixed bag for investors. "The disclosures from Facebook highlight how sensitive the management team is to the share price today," Stifel, Nicolaus & Co. analyst Jordan Rohan told the Wall Street Journal. But he also pointed out that the increased number of shares on the market after employee sales could give investors "stock indigestion."