Amid a bevy of discouraging news surrounding Facebook, investors may take some comfort in this factoid: CEO Mark Zuckerberg said that he fully intends to keep all of his holdings in his company for at least another year. That’s right, Facebook’s first insider has promised not to sell a single share.
“As of the date of this report, Mark Zuckerberg … has informed us that he has no intention to conduct any sale transactions in our securities for at least 12 months,” Facebook general counsel Theodore Ullyot said in a Form 8-K Current Report filed Tuesday with the Securities and Exchange Commission.
According to the document, Zuckerberg holds roughly 444 million shares of Class B common stock, and an additional 60 million Class B shares issuable upon the exercise of an option. All of those shares are staying put for the foreseeable future. The CEO previously sold 30 million shares (at $38 a share) through the company’s initial public offering.
Investors may also like that Facebook board members Marc Andreessen and Donald Graham only plan to sell enough shares to cover their tax liabilities, and nothing more. “Other than such tax-related sales, Mr. Andreessen and Mr. Graham have no present intention to sell any shares of our common stock held by them personally,” the report said.
Zuckerberg’s continued commitment to his company may help temper the market’s reaction to price downgrades and lowered expectations around revenue. The stock has gained about 2 percent in after-hours trading, but that’s after closing the day at $17.73, a new market-close low for the company.
The bit of good news is buried in the Current Report, which primarily addresses Facebook’s plans to cover income tax obligations associated with vested restricted stock units (RSUs) granted to employees prior to January 1, 2011. This batch of shares will vest on October 25 and be eligible for sale on October 29, 2012. Facebook expects to deliver 124 million shares of common stock, as well as withhold an additional 101 million shares to settle the RSUs.
The company also notes that it will not conduct a secondary offering, and that it will waive a “market-stand-off” provision to allow additional employee shares to vest. A total of 234 million shares will be eligible for sale on October 29, 2012.
Facebook will report third quarter earnings on October 23, 2012, according to the report.