Zuckerberg Won't Sell Facebook Shares for a Year
By: After Facebook shares fell further to yet another all-time low, the social network filed an 8-K with the SEC, with a few positive headlines for the company. Most notably, CEO Mark Zuckerberg “has no intention to conduct any sale transactions in our securities for at least 12 months.”
The fact that he “has not adopted a 10b5-1” selling plan, indicates that he has no plans to sell anytime soon.
The fact that Facebook’s largest shareholder is not planning to sell is certainly not a huge surprise, but considering director Peter Thiel’s stock sales, which hit the stock, this is a crucial reassurance for investors. It’s also a sign that Facebook is taking steps to speak to investors mounting concerns. (Read More: Investor Peter Thiel Sells Facebook Shares.)
Facebook board members Marc Andreessen and Donald Graham will be selling shares, as part of 10b5-1 selling plans. But the SEC filing notes that these sales are only tax-related, and that “Mr. Andreessen and Mr. Graham have no present intention to sell any shares of our common stock held by them personally.”
Andreessen’s spokesperson contacted us to make it clear that he plans to hold on to all of his remaining shares “indefinitely,” and he’s only selling enough shares to cover his tax obligations.
(Click here for an after-hours Facebook quote.)
This seems a stark contrast to director Peter Thiel, who did not make any public statement about his selling plan.
Some positive news: The number of shares outstanding will be reduced by 101 million.
Facebook has structured its tax withholding for employees restricted stock, so when it distributes 124 million shares to employees, it’ll hold on to 101 million shares, the equivalent of a 45 percent withholding tax rate. That means that it’s taking nearly 4 percent of shares out of circulation — the same effect, as say, a stock buyback. (Read More: Accel Unloads Facebook on Its Own Investors: Sources.)
Another headline — Facebook is distributing shares to employees earlier, so now they’ll be able to sell on October 29, instead of mid-November, the plan until today’s filing.
Facebook is accelerating its plan to issue restricted stock units to its employees, moving that date from mid-November, to after its earnings, which the company says it plans to announce on October 23. Facebook says employee stock will now vest on October 25, allowing them to sell on October 29.
-By CNBC's Julia Boorstin
@JBoorstin
Questions? Comments? MediaMoney@cnbc.com
