Facebook, Zuckerberg to sell shares worth billions
Mark Zuckerberg, the CEO of Facebook, is selling upward of 41 million shares in the company he helped found.
The sale is part of a larger unloading of 70 million shares of Class A Facebook stock, the Associated Press reports today. "Our principal purpose for selling shares in this offering is to obtain additional capital," reps for Facebook wrote in an SEC filing. "We intend to use the net proceeds to us from this offering for working capital and other general corporate purposes; however, we do not currently have any specific uses of the net proceeds planned."
As for Mr. Zuckerberg's 41 million share sale, that has more to do with his decision to exercise an option on 60 million shares of Class B stock.
"We expect that the majority of the net proceeds Mr. Zuckerberg will receive upon such sale [of the Class A stock] will be used to satisfy taxes that he will incur in connection" with the acquisition of the Class B stock, according to the SEC filing.
Of course, as Matt Levine of Bloomberg notes, the sale also has a lot to do with the fact that Facebook is joining the S&P 500, and "index investors want to buy. There is demand, so Facebook is creating the supply," Mr. Levine writes.
In related news, earlier this week, Facebook introduced automatically-playing video advertisements in its News Feed. "Marketers will be able to use this new format to tell their stories to a large number of people on Facebook in a short amount of time," the company said in a blog post. The ads, which will presumably help the billion-plus-member social network boost revenue, were greeted favorably on Wall Street.
The first Facebook video ad will be a teaser for the forthcoming sci-fi flick Divergent.
