Zuckerberg to sell 70 million Facebook shares

Facebook and chairman and chief executive Mark Zuckerberg are selling a combined 70 million shares of Class A stock as the social media company prepares to join the Standard & Poor’s 500 index.

Zuckerberg to sell 70 million Facebook shares

Facebook and chairman and chief executive Mark Zuckerberg are selling a combined 70 million shares of Class A stock as the social media company prepares to join the Standard & Poor’s 500 index.

The offering includes more than 41 million shares from Mr Zuckerberg, who will also buy Class B shares that carry more voting weight.

After a pre-market stock dip of more than 4% on the news, Facebook’s stock recovered somewhat and was down less than 1% in afternoon trading today.

The company, based in Menlo Park, California, said today that the Class A shares will be offered mainly to index funds whose portfolios are based on stocks included in the index.

The S&P 500 will add Facebook tomorrow after markets close. The index is a list of companies that have a market capitalisation of more than $4bn (€2.9bn) and is meant to be a snapshot of the US economy.

At yesterday’s closing price of $55.57 per share, that would put the total value of the offering, not counting expenses, at about $3.89bn (€2.82bn). Mr Zuckerberg’s offering of 41.3 million shares would generate about $2.3bn (€1.67bn) based on yesterday’s close, not counting expenses.

The company said Mr Zuckerberg will use most of the proceeds from his sale of Class A shares to pay taxes he will incur in connection with exercising an option to buy 60 million shares of Class B stock. He is also using part of it for charitable contributions.

It was Mr Zuckerberg’s decision to sell shares that is believed to have led to Facebook’s stock price decline.

That said, Standard & Poor’s equity analyst Scott Kessler noted that Mr Zuckerberg’s ownership has declined “only slightly” since Facebook’s May 2012 initial public offering, and that the planned sale “would only minimally reduce his stake and voting power”.

“We are not concerned by this news,” Mr Kessler said in a note to investors, reiterating a “Buy” rating on Facebook’s stock.

Each Class B share gives the shareholder 10 votes, while each Class A share comes with one vote. The deal will give Mr Zuckerberg control over nearly 63% of the voting power of the company’s outstanding stock, according to a Securities and Exchange Commission filing.

Facebook will offer 27 million Class A shares, and the company expects to use any proceeds for working capital.

The company will have 2.54 billion Class A and Class B shares outstanding after the offering, or about 4% more than it had at the end of September.

Facebook’s shares dipped 49 cents to $55.08 this afternoon. That is up about 44% from Facebook’s $38 IPO price and down only slightly from the all-time high of $55.89 that it hit yesterday.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited