Facebook Inc. (NASDAQ: FB) shares took a step back on Monday following the announcement that the social media giant would not go through with its controversial stock split plan. In a sense, this plan would solidify CEO Mark Zuckerberg’s control over the company with a focus on the long-term management of Facebook.
According to the plan, the company would have created a third class of nonvoting shares that Zuckerberg would be able to sell without diluting his controlling stake in the company. However, Zuckerberg later withdrew his proposition to the board of directors for the reclassification of this stock, and the board agreed.
The decision to abandon this reclassification came after investors filed suit against Facebook in 2016 in protest. The idea again was that Zuckerberg would be able to reduce his stake while still maintaining control of Facebook.
Zuckerberg would go on to say that despite declining to reclassify shares he will continue with his plan to fund his charity. Zuckerberg plans to see at least $6 billion shares of his Facebook stock to fund the Chan Zuckerberg Initiative that he and his wife had founded.
According to a recent SEC filing:
On September 22, 2017, Mr. Zuckerberg announced that he anticipates selling 35 million to 75 million shares of Facebook stock over approximately 18 months from the date of this report in order to fund the philanthropic initiatives of Mr. Zuckerberg and his wife, Priscilla Chan, in education, science and advocacy. Any sale of shares beneficially owned by Mr. Zuckerberg will be disclosed publicly in accordance with the rules established by the U.S. Securities and Exchange Commission under Section 16 of the Securities Exchange Act of 1934.
Excluding Monday’s move, Facebook shares had grown nearly 50% this year alone. Over the past 52 weeks, the stock was up closer to 30%.
The shares were last seen down more than 3% at $164.45, with a consensus analyst price target of $192.62 and a 52-week range of $113.55 to $175.49.