Feeds

Facebook co-founder Moskovitz scrambles to offload his shares

Bumwad from the bank of toyland

Eight steps to building an HP BladeSystem

Facebook co-founder Dustin Moskovitz has sold over 1.3 million of his shares in the social network over the last two weeks.

Moskovitz converted some of his Class B shares - the kind that carry voting rights - into Class A shares and has been getting rid of stock at 150,000 shares a day since a couple of days after the first lock-up period on early investors ended.

Pre-IPO investors are tied into their shares for a certain period, the lock-up, to prevent a run on the stock on the first day of trading, which would stop any public company from getting off the ground.

Now that he's free to do so, Moskovitz has offloaded 1.35 million shares in total at prices ranging from $19.19 to $19.99 each, raising around $26.2m. Through his trust, Moskovitz still owns 6.15m Class A shares and 106.8m B shares, according to filings with the Securities and Exchange Commission.

Moskovitz joins a number of early investors who've jumped at the chance to reduce their stake in the social network after its dismal IPO and subsequent lack of popularity with traders.

Venture capitalist Peter Thiel, who was Facebook's first outside investor, dumped around $400m worth of his stock last week, taking his stake down by 72 per cent. Selling so much stock at once was an unusual move for a venture capitalist, whose funds normally do want to sell their shares once the company they supported gets to market, but ordinarily do so in dribs and drabs so as not to drive down the stock price.

Whether Thiel's funds just wanted their money for other investments or had some other motivation, the size of the deal so soon after the lock-up period expired has caused concern that they simply don't have a good opinion of the company's future anymore.

Facebook's first day of trading was marred by technical glitches at the NASDAQ that stopped traders knowing if their buys and sells had gone through or not. The dust settled on those snafus in a few days, but the stock has never lived up to its pre-trading promise, halving since it launched mid-May at $38 to $19.10 today.

Even before the first day of trading, some pundits had speculated that the stock was overpriced, driven by traders' excitement at something new that looked good rather than a serious match of price to future earnings. Facebook has yet to find a way to efficiently monetise mobile customers, its fastest-growing user base, and questions still remain about the effectiveness of its advertising online, its primary source of revenue. ®

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
Bose says today IS F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.