Connect to share and comment

Mark Zuckerberg cashed out millions of Facebook shares before price plunged, report says

Mark Zuckerberg and leading Facebook investors cashed out millions of shares before the price plunged, according to company filings.

Mark zuckerberg pinterest 160212Enlarge
Mark Zuckerberg has made a profile on Pinterest, the fastest growing social media site online. (Screengrab/Screengrab)

Mark Zuckerberg and leading Facebook investors cashed out millions of shares before the price plunged, according to company filings.

A day after CNET News reported that Facebook shareholders were suing the website, its CEO and a number of banks for concealing crucial information ahead of Facebook's IPO, it was also revealed a company executive issued a warning that Facebook's revenues were lower than expected.

Such information that would have almost certainly reduced the opening price of the newly floated stock, according to Australia's Adelaide Advertiser.

Facebook is already facing multiple lawsuits by disgruntled shareholders and, the AP wrote, is the subject of two congressional inquiries.

Meanwhile, Morgan Stanley has announced that as the company’s top underwriter, it is prepared to pay back investors who were burned when they bought shares.

The bank announced Thursday that it was reviewing Facebook trades and would adjust prices for some retail customers who overpaid, the Associated Press reported.

More from GlobalPost: Facebook, Zuckerberg and banks sued over IPO

After pricing at $38, Facebook's stock closed up 23 cents on Friday but has been down ever since. On Wednesday, it closed up $1, at $32, still down nearly 16 percent from the IPO price.

The Facebook IPO had made Zuckerberg the 29th richest person on Earth, according to the Bloomberg Billionaires Index.

The world’s most popular social networking company sold 421.2 million shares for $38 each.

At that price, the 503.6 million shares and options Zuckerberg owned were valued at $19.1 billion, making him wealthier than Google co-founders Sergey Brin and Larry Page, Bloomberg wrote. 

And now company filings show Zuckerberg made a further $1.13 billion as the stock nosedived.

http://www.globalpost.com/dispatch/news/business/companies/120525/mark-zuckerberg-facebook-shares-ipo-morgan-stanley