Facebook announced a secondary public offering to sell around 70 million of its Class A shares. The offer includes 27 million shares from the company and 43 million held by shareholders, including 41.35 million held by chief executive and co-founder Mark Zuckerberg.
The proceeds for the company, estimated at almost $1.5 billion based on the current share price, will go towards working capital and other general corporate purposes.
Zuckerberg, meanwhile, is expected to use his proceeds to settle taxes due on the exercise of an option to acquire 60 million Class B shares in the company. Zurckerberg is converting 41.35 million of these shares to Class A stock, on a one-for-one basis, and these will be the shares sold by him in the public offering.
The Class B shares carry ten voting rights each, compared to just one vote for the Class A shares. After the transactions, Zuckerberg will hold 62.8 per cent of the voting rights in Facebook, compared to 58.8 per cent previously. However, it does not yet take into account a planned donation by Zuckerberg this month of 18 million Class B shares, converted to Class A shares.In addition, the social network company confirmed that its stock will join the S&P 500, an index of leading companies on US stock markets.