The Facebook Inc (NASDAQ:FB) stock hit the `pause' button on its downward slide on Wednesday as a series of measures taken by the company to infuse confidence among investors and employees started to take effect.
On Wednesday shares in the social networking site rose 4.8 percent to $18.58.
The previous day the company had, in a regulatory filing with the Securities and Exchange Commission, said that founder and chief executive Mark Zuckerberg had pledged not to sell any more of his 500 million shares for more than a year.
The announcement by the company came even as the shares sank to a new low on Tuesday at $17.55, having shaved off more than 50 percent from its May IPO price of $38 a share.
Has FB Found The Bottom and Ready To Recover? Find Out Here
Facebook's filing was supported by a `Buy' call from broker Jefferies that also set a $30 price target for the stock, saying that its scale and attraction for marketers was still strong as the company added more users.
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 has also taken measures to effectively buyback stock grants owed to employees, thus reducing its floating stock.
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.