Facebook Proposes Follow-On Offering

Dec 19, 2013


Article ImageDid you miss your chance to grab up Facebook shares during its initial public offering - or during the stock dump that happened shortly after? Well, you may have another chance...sort of. Facebook, Inc. announced that it is commencing an underwritten registered public offering of 70,000,000 shares of its Class A common stock. Gigom estimates this to be valued at approximately $3.9 billion.

Facebook is offering a total of 27,004,761 shares, and a total of 42,995,239 shares are being offered by certain selling stockholders -- including 41,350,000 shares offered by Mark Zuckerberg. Standard & Poor's, a division of McGraw-Hill Financial Inc. (S&P), has announced that, effective as of the close of trading on December 20, 2013, it plans to include Facebook's Class A common stock in the S&P 500 Index.

Facebook intends to use the net proceeds of the offering for working capital and other general corporate purposes. Facebook will not receive any proceeds from the sale of shares by stockholders. Facebook expects that the majority of the net proceeds Mr. Zuckerberg will receive upon the sale of shares in the offering will be used to satisfy taxes that he will incur in connection with his exercise, in full, of an outstanding stock option to purchase 60,000,000 shares of Class B common stock.