Ahead of the Bell: Facebook up on Zuck pledge
NEW YORK (AP) — The announcement that Facebook Inc.'s CEO, Mark Zuckerberg, won't sell stock in the company for at least the next 12 months sent the shares up in premarket trading Wednesday.
Zuckerberg holds about 504 million shares and options of Facebook. The company currently has about 692 million shares eligible for sale.
The shares were up 52 cents, or 2.9 percent, at $18.25. That more than wiped out Tuesday's loss, during which the stock hit an all-time low of $17.55. That's less than half of the $38 the shares went for in their May IPO.
Investors have been concerned with the prospect of Facebook's early investors flooding the market with shares, weighing on the stock price. In a regulatory filing Tuesday, the company soothed those fears by revealing Zuckerberg's commitment. It also said that two of its board members, Marc Andreessen and Donald Graham, have no "present intention" to sell stock beyond what they need to cover taxes.
Facebook also said that it plans to report its third-quarter earnings on Oct. 23.
On Tuesday, Morgan Stanley analyst Scott Devitt cut his target price on the stock to $32 from $38, saying that its mobile advertising revenue is just starting to grow. Morgan Stanley led Facebook's IPO.