Facebook stock rallies after Mark Zuckerberg says he won’t sell
What a difference a day has made for Facebook.
Shares of the social networking giant perked up Wednesday, rising 4.4% in heavy trading to $18.51 as they crawled back from the record low of $17.73 they set Tuesday.
Facebook can, at least in part, thank its new friends: Jefferies analysts Brian Pitz and Brian Fitzgerald, who initiated coverage of the stock with a buy rating and a $30 price target late Tuesday and said “we think Facebook is must-buy media for marketers as they follow users online.”
Their price target is still below the Wall Street average of $32.63, but not as high as the high price target, which remains at $41.
The well-timed injection of optimism came as the Menlo Park, Calif., company made its move to buck up confidence on Wall Street. In a regulatory filing, Facebook said founder and chief executive Mark Zuckerberg would not sell his shares for at least the next 12 months.
Of course, the Jefferies analysts -- who recently jumped ship from UBS -- also cited expiring lockups (lifting of restrictions on insiders selling hundreds of millions of shares) as one of the major concerns for investors in Facebook.
Facebook sought to address that concern Tuesday. It said it would not sell stock to cover a nearly $2-billion tax bill for stock-based compensation and it would allow some employees to cash in their stock early.
Facebook essentially engineered a stock buyback, reducing the number of total shares by 101 million, said Wedbush Securities analyst Michael Pachter.
“That’s a big deal,” Pachter said.
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