Facebook says CEO won't sell stock for 1 year

  • AP, New York
  • Updated: Sep 05, 2012 07:16 IST
A-file-photo-shows-an-illustration-made-with-figurines-set-up-in-front-of-Facebook-s-homepage-AFP-Joel-Sage

Facebook's stock got some reprieve in after-hours trading done on Tuesday after the company said its CEO, Mark Zuckerberg, won't sell stock in the company for at least the next 12 months.

Investors have been concerned with the expiration of lockup periods that allow insiders to sell stock in Facebook. If a lot of shares flood the market the stock price may fall. Adding to those worries, Peter Thiel, a board member and Facebook's earliest big investor, has shed most of his holdings in the Menlo Park, California-based company.

In the Tuesday regulatory filing, Facebook allayed some of those fears. In addition to its disclosure about Zuckerberg's plans, it said that two of its board members, Marc Andreessen and Donald Graham, plan to sell shares to cover taxes, but have no "present intention" to sell any additional stock.

Earlier in the day the social media company's stock fell to its lowest point since its initial public offering after an analyst for the bank that orchestrated its IPO cut his target price on the stock to $32 from $38 saying that its mobile advertising revenue is just starting to grow. The latter was Facebook's IPO price - the one it hasn't hit since its first day of trading on May 18.

Morgan Stanley analyst Scott Devitt still has an "Overweight" rating on Facebook stock. Doug Anmuth, an analyst at JPMorgan, which was another large underwriter of the offering, also cut his target price on Tuesday, to $30 from $45. He kept an "Overweight" rating as well.

Facebook's stock fell to $17.55 in Tuesday trading, its lowest point ever, and closed down 33 cents at $17.73. That's less than half of the stock's initial public offering price of $38. It climbed 31 cents, or 1.8%, to $18.04 in after-hours trading following the disclosure that Zuckerberg will hold off on selling.

Facebook also said that it plans to report its third-quarter earnings on Oct. 23.

From Around the Web
Sponsored by Revcontent

also read

HT Explains: All you should know about Goods and Services Tax
Show comments

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Chrome and Ad BlockPlus users

1.Press the ‘ABP’ icon in your toolbar at top right of this page

2. Click on ‘Enabled on this site’; this should now change to ‘Disabled on this site’


chrome



For Chrome and Ad Block users

1.Press the ‘AdBlock’ icon in your toolbar

2.Select the option ‘Don’t run on pages on this domain’ and then click ‘exclude’ on the pop up


chrome

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Mozilla and AdBlock Plus (ABP) users

1.Press the ‘ABP’ icon in your toolbar

2.Select the option ‘Disable on hindustantimes.com’


chrome

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Internet Explorer and AdBlock Plus users

1.Press the ‘AdBlock Plus’ icon in your status bar at the bottom of the screen

2.Select the option ‘Disable on hindustantimes.com’


chrome

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Safari and AdBlock users

1.Press the ‘AdBlock’ icon in your toolbar

2.Select the option ‘Don't run pages on this domain’ and then click 'exclude'


chrome