Facebook Inc. (NASDAQ:FB) announced Friday that it has priced shares at $55.05 for the secondary public offering. The social networking giant, its CEO Mark Zuckerberg and board member Mark Andreessen will be selling a combined total of 70 million shares to raise about $3.85 billion. The secondary offering is expected to close on December 26, 2013.
Facebook to sell shares primarily to index funds
Facebook Inc. (NASDAQ:FB) was included in the S&P 500 index on December 20. The company will be selling 27 million Class A shares, Mark Zuckerberg 41.35 million shares and Andreessen will offload the remaining 1.6 million shares. At the given price, the social networking giant would raise $1.5 billion, Zuckerberg will fetch $2.3 billion and Andreessen is expected to pocket $89 million from the offering.
Facebook Inc. (NASDAQ:FB) said that it will be selling its shares primarily to index funds that have S&P 500 stocks in their portfolios. However, the company didn't provide any details of how it will use the proceeds. Facebook hasn't planned any specific uses of the proceeds. But the company said it may use the proceeds for general corporate purposes and to improve working capital. As of September 30, the world's largest social networking company had $3.1 billion in cash.
Facebook CEO sells shares to meet tax obligations
In addition, a large part of Mark Zuckerberg's proceeds will be used to meet tax obligations. He will incur the taxes after exercising the option to buy 60 million Class B shares of the company. The Class B shares of Facebook Inc. (NASDAQ:FB) have an exercise price of only 6 cents a share, according to an SEC filing. Facebook CEO's tax obligations will be based on the difference between the exercise price of the options and the market price of the company's shares. It will reduce his voting power from 58.8% to 56.1%. Zuckerberg has also announced that he will donate 18 million shares worth about $1 billion to the Silicon Valley Community Foundation. Even after the sale and donation, Zuckerberg will own over 444 million shares of Facebook.
Facebook Inc. (NASDAQ:FB) shares surged 4.31% to $57.49 at 11:02 AM EST.