It’s still too early to say that definitively. But it’s possible as the social media company’s shares, which hit a record low yesterday, are up 4.6% in mid-afternoon trading. Investors seem to be responding to the announcement that CEO Mark Zuckerberg won’t sell any of his 504M shares for at least a year. The company also said that for tax purposes it will hold on to 101M shares it was authorized to issue. These decisions modestly reduce the number of Facebook shares that could hit the market over the next several months. So-called “lock up” rules governing Facebook’s initial public offering in May require inside shareholders to wait before they sell their stock; those waiting periods have already begun to expire– a process that will stretch into early 2013. Public investors feared that Facebook’s stock price could continue to fall if insiders decide to take the money and run. Although nobody imagined that Zuckerberg would bail out of the company he created, the announcement late yesterday that he won’t sell any shares for a year “signals that management is concerned about the current stock price and its future evolution (a non-trivial fact for a company with Facebook’s governance structure), and that it sees upside from the current price,” Bernstein Research’s Carlos Kirjner says. Pivotal Research Group’s Brian Wieser also says that the news is “incrementally favorable” but potentially “important for market sentiment.” Facebook went public in May at $38 a share.
By DAVID LIEBERMAN, Financial Editor | Wednesday September 5, 2012 @ 3:12pm EDTTags: Facebook, Mark Zuckerberg
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