NEW YORK (AP) — Facebook's stock increased nearly 5 percent on Wednesday following a disclosure that its CEO, Mark Zuckerberg, won't sell stock in the company for at least a year.
Zuckerberg holds about 504 million shares and options and had been eligible to start selling them in November. The company currently has about 692 million shares eligible for sale. The concern is that if Zuckerberg floods the market with additional shares, prices would go down further.
The stock is still trading at less than half of the $38 that it went for in Facebook's May initial public offering. It gained 85 cents, or 4.8 percent, to close at $18.58. That more than wiped out Tuesday's loss, during which the stock hit an all-time low of $17.55. It had closed at $17.73.
Since the IPO, Facebook's stock has been down on 45 trading days, up on 29 and unchanged on two.
Facebook revealed Zuckerberg's commitment in a regulatory filing late Tuesday. 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.
Even without Zuckerberg's share, up to 1.2 billion more shares could enter the market over the next several months, including those from employees eligible to sell on Oct. 29.
Need to finance your business? Get a business loan today. Apply free!