By: Denise Totten
Facebook Inc. (NASDAQ:FB) announced on Tuesday that its Chief Executive Mark Zuckerberg would not sell stock in the firm for almost a year, a plan to comfort investors that shares would rush the market when lockup phases that let insiders sell stock end in the coming months.
The social networking tycoon was hoping to control some damage following Peter Thiel, a Facebook director and its initial investor, selling most of his stake in the firm the previous month.
In a regulatory filing following financial markets ending on Tuesday, Facebook (FB) stated that two of its board members, Marc Andreessen and Donald Graham, intend to sell shares to compensate tax liabilities, but would not sell further stock.
The company also stated that it would not sell stock to compensate an almost $2-billion tax bill associated to stock compensation and that it would use cash as an alternative and borrow from its credit facilities. The moves lower the total shares outstanding by nearly 101 million.
This is removing some of the worries away from the lockups, but there are yet a large number of shares set to unlock, Wedbush Securities expert Michael Pachter stated.
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