Shares edged higher this morning, following CEOMark Zuckerberg‘s declaration that he won’t sell any shares for at least 12 months. Zuckerberg could not have expected more from the ploy.
Investors, however, should demand much more. For Facebook, this is less a decision to make new friends than a clever bit of foolery.
Here’s what that filing told us: Zuckerberg isn’t selling. Directors Marc Andreessen and Donald Graham will sell just enough to cover their tax bill. The stock will come under fresh—and fairly intense—selling pressure in coming months; Facebook will allow employees and early investors to cash out equity sooner than expected. “We are still talking about 800 million shares potentially coming to market in November, down from what could have been 1.2 billion, assuming Mark sold his full stake, ” says Evercore analyst Ken Sena, “ which I think few expected him to do.” And by withholding 101 million shares to cover tax bills, Facebook will, in effect, execute a stock buyback.