Facebook’s stock has been completely hammered since it went public, especially in the last couple of weeks. It is trading near its all time low, at around $17. Investors seem to have lost confidence that Facebook will be able to monetize its growing mobile audience. With Facebook’s upcoming secondary offering, the stock price was bound to be pushed even lower. However, Facebook announced today that it has cancelled its seconday offering.
Zuckerberg won’t be selling any stock for another year, and Marc Andreessen and Don Graham will be selling only some of their holdings to pay taxes.
Facebook is trying to time its employee lockup periods such that there is no sudden dumping of its stock on the market. Instead of holding its planned secondary offering to pay for taxes related to RSUs, it will pay the taxes from its cash reserves which increased by $10 billion following the IPO.
While Facebook’s IPO is perceived to be a flop, it was a hit in the sense they managed to raise the maximum cash they could at the highest possible valuation they could do it.
Zuckerberg has already made it clear that they aren’t going to focus on the stock price, but will rather focus on the underlying business itself.
While there will still be significant downward pressure on its stock when the lockup period expires, that’s still a couple of months away.