On Monday Facebook will officially be a member of the Standard & Poor’s 500-stick index. Facebook and Zuckerberg will be offering 70 millions share to the public to commemorate this momentous occasion. With the 70 million shares up for grabs, based on their current stock price of $55.50 per share, the offering would raise close to $3.8 billion. However the shares will likely be slightly lower than $55.50 when released to reflect the dilution in regards to this offering.
Facebook as a company will offer over 27 million Class A shares, which would be used for working capital. Facebook said it has no plans for the extra capital, however many have said that the offering could be used to bolster Facebook’s pursuit to fund future deals. This seems likely as Facebook is an aggressive acquirer of smaller rivals having all ready purchased Instagram and just recently having an offer to buy Snapchat for $3 billion turned down.
Mark Zuckerberg will also exercise stock control to purchase 60 million Class B shares (which are used to hold majority voting rights), he will then sell 41.35 million of those Class B shares as Class A shares using the majority of the profits to pay taxes connected to the exercise of his options. With Zuckerberg giving some up of his Class B shares he will still control more than 60 percent of the voting rights. As well as these offerings a filing has also stated that Zuckerberg will also make a charity donation of 18 million shares (roughly $1 billion) to the Silicon Valley Community Foundation, a nonprofit organization that he has supported previously before in the past. What do you think of this news? Will you be snapping up some shares when they become available?
Thank you The New York Times for providing us with this information.
Image courtesy of The Hindu.