Facebook has priced a secondary offering of its stock at $US55.05 a share in a deal that will generate $US2.3 billion ($A2.6 billion) for chief executive Mark Zuckerberg.
The terms announced on Friday are slightly below the $US55.12 closing price of Facebook’s stock on Friday. The stock is now well above the $US38 price set in Facebook’s initial public offering 19 months ago, rebounding from a trough of $US17.55 last year fuelled by concerns about the online social network’s slowing growth and ability to sell ads as more of its traffic came from smartphones instead of desktop computers.
Facebook has proven sceptics wrong as its mobile advertising has soared and boosted its revenue, to the delight of investors. The company’s stock has more than doubled in value this year, paving the way for the secondary stock offering of 70 million shares.
Of those, Zuckerberg is selling more than 41 million shares, primarily to cover the taxes he has to pay as a result of exercising an option to buy 60 million Facebook shares that carry more voting power.
The 60 million shares of Facebook’s Class B stock had an exercise price of just 6 US cents a share, according to the company’s regulatory filings. Zuckerberg’s tax bill will be based on the difference between the options’ exercise price and the market value of Facebook’s stock.
Facebook is selling 27 million shares and company board member Marc Andreessen is selling 1.6 million shares. Andreessen, a venture capitalist who became rich as co-founder of web browser pioneer Netscape Communications, was among Facebook’s early investors.
The secondary offering will raise nearly $US1.5 billion ($A1.7 billion) before expenses for Facebook, which ended September with $US3.1 billion ($A3.51 billion) in the bank.