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  • Zuckerberg to sell Facebook shares worth about $2.3 billion

    (Reuters) - Facebook Inc founder and CEO Mark Zuckerberg will sell 41.4 million shares worth about $2.3 billion to pay a tax bill, as part of an offering by the social network of 70 million Class A common shares.

    Facebook shares, which have doubled in value this year, were down 4 percent at $53.54 before the bell.

    Zuckerberg's sale will reduce his voting power to 56.1 percent from 58.8 percent, the company said in a filing on Thursday.

    Facebook said it expects Zuckerberg to use most of the net proceeds from the sale to satisfy taxes related to the exercise of an option to buy 60 million Class B shares.

    Each Class A share is entitled to one vote, while Class B shares are entitled to 10 votes and are convertible at any time into one Class A share.

    Board member Marc Andreessen will also sell 1.65 million Class A shares, while Facebook will sell 27 million.

    J.P. Morgan, BofA Merrill Lynch, Morgan Stanley and Barclays are joint bookrunners for the offering.


  • #2
    What Mark Zuckerberg's Facebook selloff really means

    FORTUNE -- Mark Zuckerberg, founder and CEO of Facebook, will sell 41.4 million shares worth of stock in the company, worth $2.3 billion, to pay a tax bill, the company said. He apparently incurred the tax liability when he exercised the option to buy 60 million class B shares, which carries 10 times the voting power of Class A shares, the kind sold to schlubs like us.

    This will reduce Zuck's voting power from 58.8% to 56.1%, so he is still king of the hill in Menlo Park.

    Now, Zuck selling Facebook shares is the headline everyone is talking about, but that's really just the side story here. In my view, the real story is that Zuck's sale is part of a new public offering by Facebook (FB) of some 70 million Class A shares. Of that total, Zuck is contributing 41.35 million shares (the proceeds of which go to the IRS or whatever), while Facebook (the company) is offering 27 million shares, which is dilutive to existing shareholders.

    The company says it plans on using the money (roughly $1.5 billion) from its portion of the share sale "for working capital and other general corporate purposes."