Quoting familiar sources, The Wall Street Journal reported on Friday that Facebook (FB) is planning to reduce its $3 billion line of credit to $1.5 billion, and extend the term of loans. According to sources, this is because Facebook does not need so much money to pay the taxes brought by the exercise of stock options of its employees. After the news, FB stock price lost sharply on Friday.
Facebook has said that if the market condition is bleak, the company will pay the relevant taxes by the issuance of new shares, loans or the use of existing cash reserves.
Since its IPO, FB stock price has fallen by 45%, therefore, it is difficult for Facebook to inject more shares into the market. Facebook is currently seeking to extend the term of the credit line from one year to three years, in order to have more time to repay the bank loans.
The social networking giant also announced on Friday that its global communications vice president. Joe Lockhart, who once worked as the press secretary of former U.S. President Bill Clinton, will leave the company, but the specific departure time has not been determined. Joe Lockhart was invited to join Facebook in June last year; this is considered one of the measures the company has taken to expand its political influence.
A spokeswoman of Facebook said on Friday that Lockhart left the company because he wanted to stay on the East Coast, and is unwilling to move to Facebook’s new corporate headquarter located in California. She said, Facebook hopes Lockhart to continue to cooperate with the company as an independent consultant.
Lockhart had served as chief spokesman and senior adviser for former U.S. President Bill Clinton from 1998 to 2000, and was the co-founder of strategic communications consulting firm Glover Park Group established in 2001.
Since Faceook IPO in May of this year, a number of executives have chosen to leave the company, including the former CTO (chief technology officer) Bret Taylor, platform partner director Ethan Beard, and platform market director Katie Mitic. How to retain talents seems to have become a major problem faced by Facebook.
It was reported Facebook is currently testing restaurant review function. This new feature will result in the direct competition among Facebook, and shop review site Yelp (YELP) as well as Google (GOOG).
FB stock price plummeted by 4.73%, or $1.04 to $20.91 with 40.53 million shares traded, below the average daily trading volume of 47.74 million shares on Friday. FB stock has a high P/E multiple of 116.73, in view of the slowdown in its revenue and earnings growth, this seems to be not a good factor to the social networking giant. The current FB stock price is 44.97% lower than its IPO price of $38 and 53.53% below the highest price record of $45.0.