Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SAN FRANCISCO (AP) - Facebook has priced a secondary offering of its stock at $55.05 a share in a deal that will generate a $2.3 billion windfall for CEO Mark Zuckerberg.
The terms announced Friday are just slightly below the $55.12 closing price of Facebook's stock Friday. The stock is now well above the $38 price set in Facebook's initial public offering 19 months ago, rebounding from a trough of $17.55 last year fueled 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 the skeptics wrong as its mobile advertising has soared to boost its revenue to the delight of investors. The company's stock has more than doubled in value so far this year, paving the way for this 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 cents per 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.
Even after he sells some of his stake, Zuckerberg will remain Facebook's controlling stockholder after the sale.
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 $1.5 billion before expenses for Facebook, which ended September with $3.1 billion in the bank.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
