Facebook CEO Mark Zuckerberg on Thursday will sell $2.3 billion worth of his company’s stock largely to pay tax bills on options that he is exercising.
The sale is part of a 70 million share offering. Zuckerberg is selling 41.35 of those shares. Marc Andreessen, a Facebook investor, is also selling 1.6 million shares. Facebook’s stock was trading at $54 Thursday morning, valuing Andreessen’s sale at around $86.4 million. The remaining 27.05 million are newly issued Facebook shares.
Facebook will join the Standard and Poor’s 100 and 500, blue chip indices that serve as a benchmark for the economy, on Dec. 20. The news, which was announced by the S&P late Wednesday, sent Facebook’s stock up as much as nearly 5% in after hours trading as the S&P comes with a built-in base of fund managers. Facebook reported several consecutive quarters of profitability as a public company and its market cap ballooned to well above $100 billion, making it the largest company not to be included in the index.
Facebook “intends to use the net proceeds of the offering for working capital and other general corporate purposes,” according to a press release from the company. In September, Forbes estimated Zuckerberg’s fortune at $19 billion, double last year’s amount. Facebook’s stock has risen 108% over the last year.
Is Facebook in trouble? What could more working capital be for? Is Zuckerberg pursuing other interests or perhaps planning on rolling out other platforms? Or could it all be related to the shift into the S&P? What do you think, Let me know in the comments below?
