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Facebook rules out more share sales



Needs to pay its tax-bill

Social notworking site Facebook has ruled out flogging more of its shares to pay its tax bill. Facebook has to come up with nearly $2 billion tax bill but the fear is that more Facebook shares being sold will send the price falling further. 

The company staff are also miffed that they cant ditch their own shares which they are watching fall daily. The company has decided to allow its staff to sell their shares a bit early, but the fear of $2 billion worth ending up in the market has investors really nervous.

Facebook has lost more than 50 percent of its market value since going public in May, said on Tuesday its total shares outstanding will be reduced by roughly 101 million shares as a result of the move. Facebook said it will cover the stock compensation tax bill with existing cash and with borrowing from its credit facilities.

Earlier on Tuesday, analyst Scott Devitt of Morgan Stanley, which acted as the lead underwriter for Facebook's IPO, cut his price target for Facebook to $32 a share from the IPO price of $38. JP Morgan, which also underwrote the IPO, cut its price target to $30 from $45 on Tuesday. We are predicting that the share price will settle at $13 each.

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