Facebook roundup: employees sell shares, anti-trust suit over Credits, Nasdaq compensation plan and more
Facebook execs and board member sell some shares – With the end of an employee lockout this week, some top Facebook executives have sold portions of their shares. COO Sheryl Sandberg sold less than 2 percent of her shares for more than $7.4 million. Chief Accounting Officer David Spillane sold 256,000 shares, which is more than half his entire stake, raising $5.4 million, and General Counsel Ted Ullyot sold 149,075 shares, getting more than $3 million. Early investor and board member Jim Breyer sold $81 million worth of Facebook stock earlier this week. Breyer still holds more than 7.2 million Facebook shares. VP of Engineering Mike Schroepfer filed an SEC document today indicating that he is not selling any shares at this time. Facebook stock closed at $21.18 today, down nearly 9 percent from last week.
Facebook sued over Credits - Kickflip Inc., which does business as Gambit, sued Facebook this week over claims that the social network broke antitrust laws with its Credits program. Business Week says Gambit was the leading virtual currency and payment-processing provider to social game developers. Gambit claims Facebook’s decision to require Facebook Credits in 2009 destroyed a “vibrant and competitive market.” The case has been filed in federal court in Wilmington, Delaware. Facebook says the claim is “without merit.”
SEC to look more closely at Nasdaq compensation plan – The U.S. Securities and Exchange Commission has said it would extend proceedings to review Nasdaq OMX’s $62 million compensation plan following the exchange’s botched handling of Facebook’s initial public offering. Brokers say they collectively lost around $500 million because of issues on the day of the IPO, including delays in orders being put through and confirmations being returned.
FB underwriters spent millions to support stock on IPO day – Facebook’s underwriters may have spent about $66 million supporting the stock’s price on the day of the company’s initial public offering, according to a blog post by economists Thomas Eisenbach and David Lucca. The report explains how underwriters likely put in bids at $38 and $40 per share as the stock threatened to fall below the $38 offer price. This would mean underwriters spent about 40 percent of their underwriting commissions. “If this estimate is correct,” the economists say, “underwriters’ reputational concerns and obligations to the firm may have outweighed their short-run profit motive.”