WASHINGTON - Facebook shares rebounded Wednesday after co-founder Mark Zuckerberg said he will not sell any of his shares for at least one year in a bid to shore up investor confidence.
His pledge came as Facebook shares hit an all-time low of $17.55 on Tuesday - less than half the May IPO price of $38.
Facebook shares got a 3 per cent boost after a new company filing with the Securities and Exchange Commission said Zuckerberg would not sell any of his 500 million shares at least for another year. In early trade the shares were up 3.2 per cent to $18.30.
Investors are apprehensive that with the expiry of lock-up period, insiders would sell their stocks leading to too much supply of a company's stock, which could spark further fall in the stock price.
Peter Thiel, a board member and Facebook's earliest big investor, has shed most of his holdings in the social networking major after the lock-up period.
Facebook co-founder Dustin Moskovitz is also on a share selling spree.
The regulatory filing further said that two of Facebook directors Marc Andreessen and Donald Graham are planning to sell shares to cover the company's tax bill.
"Other than such tax-related sales, Andreessen and Graham have no present intention to sell any shares of our common stock held by them personally," the filing said adding that "Zuckerberg has no intention to conduct any sale transactions in our securities for at least 12 months".
Zuckerberg owns about 444 million shares of Facebook plus an option to issue another 60 million.
The company raised $16 billion in the 421 million share sale in May, garnering a market valuation of $104 billion.
Analysts and investors have been concerned about the firm's ability to generate revenue from users that access the website on their mobile devices.
As more and more users access the site from mobile devices, there are fears that revenue growth from advertisements may slow.
Advertising revenue is one of the biggest contributors to Facebook's income.
Source: http://www.bruneinews.net/index.php?sid/208920684/scat/b8de8e630faf3631
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