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Is Mark Zuckerberg in over his hoodie as Facebook CEO?

Facebook's stock price slide has raised doubts about Mark Zuckerberg's role as CEO. Some say he should hand the reins to a more seasoned executive.

August 17, 2012|By Walter Hamilton and Jessica Guynn, Los Angeles Times

Zuckerberg and his lieutenants have tried in vain to reverse investor skepticism.

But they've been stymied by the difficulty in determining Facebook's actual value because the business models of social media companies are unproven.

Although Facebook has nearly a billion users, no one is sure whether advertisers can gain traction in selling products to them.

The challenge for Facebook's stock could worsen in coming months.

Facebook freed up about 271 million shares Thursday, adding to the 421 million the company sold in the IPO. An additional 192 million will be released in mid-October and a whopping 1.2 billion shares in mid-November.

Many investors are hesitant to buy Facebook shares until that cloud is lifted.

"Whatever happens this week is a dress rehearsal for November," said Kevin Landis, chief investment officer at Firsthand Capital Management in San Jose.

Investors hope Zuckerberg will be able to win over skeptics by then.

"Mark Zuckerberg has not yet proven himself a success or a failure," said Michael Pachter, an analyst at Wedbush Securities.

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