 |
| Facebook Founder and CEO Mark Zuckerberg speaks during an interview session in Washington, DC. |
New York: Facebook chief Mark Zuckerberg will sell a
chunk of his stake in the company, cashing in some $2.3 billion, as part
of a new share offering by the huge
social network.
A Facebook filing Thursday said the company would sell 70 million shares in a follow-on offering to the huge
initial public offering in May 2012.
Of
the total amount, Zuckerberg will sell around 41 million shares, mainly
to satisfy his tax obligations, the company said in a statement.
The 27 million new shares would raise some $1.5 billion for the company "for
working capital and other general corporate purposes," the statement said.
Zuckerberg's sale will have little impact on his control of the company he co-founded from his Harvard University dormitory.
He
owns an estimated 29 percent of Facebook capital, but based on the dual
classes of stock, he will still hold 56.1 percent of the voting rights
after the new offering, down from 58.8 percent.
With the proxies
he holds for other shareholders, Zuckerberg will control 62.8 percent of
the voting rights after the new offering, down from 65.2 percent.
The company said Zuckerberg will exercise his
option to purchase 60 million Class B shares and then convert the shares to Class A for the sale.
Each Class A share has one voting right, while Class B shares have 10 voting rights.
Another early Facebook investor, entrepreneur Marc Andreessen, will sell some 1.6 million shares in the offering.
The
filing with the Securities and Exchange Commission also notes that
Zuckerberg plans to donate 18 million shares to an unspecified
beneficiary. He and his wife Priscilla last year gave a similar amount
to a Silicon Valley foundation.
One of the reasons for the new
Facebook offering is to meet expected demand with Facebook being added
to the Standard & Poor's 500 index. That requires portfolio managers
who own the stock index to buy Facebook shares.
Being added to
the S&P 500 comes at the end of a year in which Facebook climbed out
from the wreckage of its much-hyped but quickly panned
stock market debut early in 2012. Facebook has been on an upward cycle since earnings showed a jump in mobile advertising revenue.
Zuckerberg's
net worth was estimated by Forbes magazine at $19 billion at the end of
September, making him the 25th richest person in the United States and
66th wealthiest in the world.
Facebook stock fell by more than
half after the 2012 IPO at $38, but have doubled since August and hit
record highs in recent weeks. The shares closed down 0.94 percent
Thursday at $55.05, not far from its all-time high of $55.89.
The
world's leading online social network reported profit of $425 million
in the quarter that ended on September 30, compared with a loss a year
earlier. Revenues rose sharply to $2.016 billion
Facebook earlier this week began serving up video ads that pop up and play when users check their
news feeds.
The leading online social network said it is testing the new
advertising technique this week with a clip teasing the new film
"Divergent."
Analysts at Bank of America/Merrill Lynch estimated
that video ads could generate a 10 to 15 percent lift in revenues for
Facebook.
The consultancy eMarketer said Facebook has become the
second largest seller of digital advertising behind Google, and that
Facebook will take in 7.4 percent of net US digital ad dollars, or $3.17
billion, in 2013.
