Newspaper article International Herald Tribune

Facebook Acts to Stabilize Stock ; 101 Million Shares Kept off Market as Zuckerberg Vows to Delay Selling

Newspaper article International Herald Tribune

Facebook Acts to Stabilize Stock ; 101 Million Shares Kept off Market as Zuckerberg Vows to Delay Selling

Article excerpt

The company said its largest shareholder, Mark Zuckerberg, would not sell his shares or options for at least another year.

"Stay focused and keep shipping" may be the motto Facebook has sought to follow since its flubbed public offering three months ago. But the company has seemed focused mostly on how to stabilize its hemorrhaging stock.

On Tuesday, it announced what amounted to a repurchase of several million shares; said its largest shareholder and chief executive, Mark Zuckerberg, would not sell his shares or options for at least another year; and moved up when some employees could start selling their shares.

The moves appeared aimed at instilling confidence into Wall Street, analysts said.

The company's stock has lost more than half its value from the public offering in mid-May, closing at $17.73 a share Tuesday. It was up more than 4 percent at $18.53 in afternoon trading Wednesday.

Still, analysts were skeptical about whether these steps, announced in filings with the U.S. Securities and Exchange Commission, would have any appreciable bearing on the stock.

Facebook employees and early investors will be able to sell hundreds of millions of shares at the end of October, which could reduce the price. The first lock-up, as this is known, will expire on Oct. 29, the company announced, moving up the date slightly. At that point, employees will be allowed to cash in approximately 220 million shares.

Another window will open in mid-November, when employees will be able to cash in approximately 780 million shares, followed by a third in December, and a final one in May 2013.

"While it's great that Mark isn't selling, you're still saddled with significant selling pressure on the stock," said Richard Greenfield, an analyst with BTIG Research. "The lock-up monkey on their back isn't going away because Mark isn't selling."

Facebook said Tuesday that it would withhold about 101 million shares to cover tax bills. That is not an uncommon decision when companies go public. …

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