Mark Zuckerberg sold $111.1M in Facebook stock To support Libra

Mark Zuckerberg has sold more than 23.1 million shares worth almost $68.3 million and he has also selling another 15.4 million worth almost $42.8 million,to support company’s latest project: the Libra Association, a blockchain cryptocurrency initiative backed by a variety of well-heeled corporations - including Facebook (FB), private venture capital firms, and major players in payment processing. 

Facebook has signed NDA with a dozen companies, including Visa Inc, Mastercard Inc, PayPal Holdings Inc. and Uber Technologies Inc, to back its cryptocurrency project, Libra. Mark Zuckerberg is expected to unveil Bitcoin rival Libra soon, however the official launch of the cryptocurrency is scheduled for 2020.

The new Libra crypto coin will be administered by the Libra Association, not by Facebook directly. The Association is grouping of Libra’s backers, each of which gets an equal voice in overseeing the currency. The Libra Association members each put the same $10 million investment into the common pot backing the currency, so no one member can claim a larger share than the others. On paper, it’s appears to be a good system, sources said.

For its part, Facebook – and its partners – are approaching the Libra project with caution. David Marcus has already said that the new crypto coin will undergo “the most extensive and most careful pre-launch oversight in financial tech history.” Libra won’t launch until the middle of next year, and while a charter is not yet public, Marcus’ statement makes clear that Libra’s rules are being drawn up in the sure knowledge that they will face close regulatory scrutiny.

Mastercard is an original member of the Libra Association, and in addition to the membership fee, it brings its payment processing network and long experience in the financial industry. In all of the recent regulatory dust-up around Libra, Mastercard’s only official statement was not to comment on the matter. Fortunately for customers, Mastercard has a far better reputation than Facebook when it comes to data protection.

Visa is very similar to Mastercard as an investment. The company is solid, having shown steady returns over an extended timeframe. It offers a low-yield dividend of 0.57%, but the share price boosts the dividend payment to a full $1 annualized. Visa’s fiscal Q3 results beat the forecasts last month, and suggest that the company will just keep chugging along with steady low- to mid-teens growth rates. Like Mastercard, Visa has not commented on the regulatory agencies’ interest in Libra.

At the same time PayPal Holdings, PayPal has been operating independently since 2015, and has shown consistent stock gains since then. Shares are up 26% year-to-date, despite a slip at the end of July. PayPal’s involvement in Libra makes eminent sense. The company’s proven expertise in payment processing and online finance are highly relevant to the Libra Association, and unlike Facebook, PayPal has not been plagued by data privacy issues. And like Mastercard and Visa, PayPal is a high-quality investment-grade stock.