southtownstar
SPLENDID 
Weather Updates

Facebook to offer 70 million shares

FILE - This Tuesday July 16 2013 file phoshows sign Facebook's headquarters Menlo Park Calif. Facebook Thursday Dec. 19 2013

FILE - This Tuesday, July 16, 2013, file photo, shows a sign at Facebook's headquarters in Menlo Park, Calif. Facebook on Thursday, Dec. 19, 2013 said it plans to offer 70 million shares of its Class A stock in a sale that includes more than 41 million shares from chairman and CEO Mark Zuckerberg, who also will buy Class B shares that carry more voting weight. (AP Photo/Ben Margot, File)

storyidforme: 59506961
tmspicid: 21628687
fileheaderid: 10200392

Updated: December 19, 2013 8:22AM



MENLO PARK, Calif. — Facebook plans to offer 70 million shares of its Class A stock in a sale that includes more than 41 million shares from chairman and CEO Mark Zuckerberg, who also will buy Class B shares that carry more voting weight.

The secondary offering of stock comes as the social media network prepares to join the Standard & Poor’s 500 index.

The Menlo Park, Calif., company said Thursday 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 on Friday after markets close. The index is a list of companies that have a market capitalization over $4 billion and is meant to be a snapshot of the U.S. economy.

At Wednesday’s closing price of $55.57 per share, that would put the total value of the offering, not counting expenses, at about $3.89 billion. Zuckerberg’s offering of 41.3 million shares would generate about $2.3 billion based on Wednesday’s close, not counting expenses.

The company said 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.

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

Facebook Inc. 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 percent more than it had at the end of September.

Facebook’s stock went public in 2012. After a rocky start, the company’s shares gained momentum and were up more than 46 percent from their initial public offering price of $38, as of Wednesday’s close.



© 2014 Sun-Times Media, LLC. All rights reserved. This material may not be copied or distributed without permission. For more information about reprints and permissions, visit www.suntimesreprints.com. To order a reprint of this article, click here.