Zuckerberg pledge boosts Facebook shares
NEW YORK - Facebook shares got a nearly five percent boost Wednesday after co-founder Mark Zuckerberg pledged to not sell any of his shares for another year.
After sinking to a new low on Tuesday of $17.55 -- less than half the May IPO price of $38 -- Facebook rebounded 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.
The company also got help as broker Jefferies rated the stock a buy and set a $30 price target for it, citing its scale and attraction for marketers chasing online consumers.
The shares closed out the day up 4.8 percent to $18.58.
The market was already worried that employees will sell some of their 234 million shares into the market when the post-IPO holding restrictions on them end on October 29.
The company and its Wall Street underwriters have come under a hail of criticism accusing them of greedily issuing more shares than the market could handle, at an inflated price, in the hotly anticipated May 18 debut on the market.
The company raised $16 billion in the 421 million share sale, garnering a market valuation of $104 billion.
But the share price barely stayed above the issue price on the first day and sank steadily in the weeks afterward, with many analysts questioning the company's long-term earning power.
After a separate lockup period on pre-IPO investors expired in early August, one of the company's key early backers, venture capitalist Peter Thiel, reported to the SEC that he had sold 20.1 million shares in the company at around $20 a share.
That added to investor worries, pushing the shares lower, with the company's market capitalization falling below $40 billion.
© 1994-2012 Agence France-Presse