With over $50 billion in market value lost in less than four months and his company’s shares falling to record lows, Facebook (FB) Chief Executive Mark Zuckerberg is finally putting his mouth where his money is.
In a move calculated to calm investors, Facebook said in a SEC filing Tuesday that Zuckerberg, the company’s largest shareholder, currently holding about 444 million shares of Class B common stock as well as an option for an additional 60 million FB shares, would not sell his holdings for at least one year as the social networking site and his reclusive founder try to head off a potential wave of panic share-dumping.
“As of the date of this report, Mark Zuckerberg has not adopted a Rule 10b5-1 Plan and has informed [the board] that he has no intention to conduct any sale transactions in our securities for at least 12 months,” reads the 8-K filing.
Facebook also said that two of its board members, Marc Andreessen and Donald Graham have no intention of selling any shares held by them, beyond what is needed to cover tax obligations. The filing however, showed Facebook co-founder Dustin Moskowitz pulling a Peter Thiel, unloading another 450,000 shares for almost $18 million in profits.
With insiders dumping shares in large lots and as a result driving the stock’s pps lower, investors fear that with things getting worse for Facebook in terms of halting the descent of its stock value, the demand won’t be there for the 1.2 billion shares that will come on line in mid-November. It is expected that more than 2 billion Facebook shares will become eligible for trading in the next three quarters.
Considering the stock’s performance since its initial public offering, it’s hard to believe the demand will be there for all Facebook stock that is still on its way.
FB shares fell again yesterday, shedding 33 cents to close at a new low of $17.73, up slightly from the record low price of $17.55 seen during the trading day in Nasdaq after Morgan Stanley (MS) and J.P. Morgan (JPM) cut their price targets on the stock.
In after-hours trading however, following the 8-K filing, FB shares gained 1.7% to $18.03.
Facebook’s market cap — $38 billion currently from $100 billion in May– and its stock price have been on a downward spiral since the co.’s disastrous $38 a share IPO in May.