Social networking site Facebook Inc(NASDAQ:FB)’s steps
taken to infuse confidence among its investors on Tuesday, seems to be working.
On Wednesday, shares in the company were up 4.24
percent at $18.48 with more than 26 million shares being traded by mid-morning.
The company had said in a regulatory filing that
founder and chief executive would not be selling his holdings in the company
for more than a year.
It also said that senior executives, Marc Andreessen
and Donald Graham, would not sell their holdings apart from what was required
for them to meet their tax liabilities.
Another major measure was its intention to effectively
buy back 101 million shares, when it issues previously restricted stock to its
employees in October. Which means the company would be spending up to $2
billion to keep those shares from entering the market.
Has FB Found
The Bottom? Find Out Here
Facebook shares have been battered ever since its IPO
in May. The situation worsened in August when the market saw a flood of
Facebook shares due to release of previously locked-in shares.
Large insider investors who had invested in the
company before the IPO took the opportunity to offload their holdings in bulk,
sending the stock price to new lows almost every day.
But the new initiatives taken by Facebook effectively
ring-fence the stock from any further selling pressure.
They also serve to reduce the amount of Facebook stock
in the market and will spread out the amount of shares that could hit the
market in November when expiry of more locked-in shares occur.
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