Facebook
has set an IPO price range between $28 and $35. Furthermore, Facebook
co-founder and CEO Mark Zuckerberg will personally be selling 30.2 million
shares of his company.
Facebook
today once again updated its filing for an initial public offering (IPO) with
the U.S.
Securities and Exchange Commission (SEC). This is the fifth time it has done
so, and the biggest update is that Facebook has set a price range of $28 to $35
per share.
Let's
hope Mark Zuckerberg has deep pockets in his hoodie.
The
Facebook CEO plans to sell 30.2 million shares of his stake in the social
network when it publicly offers its stock later this month. If the company's
IPO prices at the top of its $28 to $35 per-share range, Zuckerberg would
pocket a "cool" $1.1 billion.
Given the sale of some 337.4 million shares, this means the company could raise
between $5.04 billion as much as $6.30 billion for itself, and between $4.41
billion and $5.51 for its investors. The company estimates it will likely net
$5.6 billion from the offering if it achieves a mid-point price of $31.50 per
share.
However,
most of that cash will go straight to Uncle Sam and California. Zuckerberg plans to partially
exercise a major stock options grant, and will use almost all of the cash he
raises from his IPO sale to pay off the taxes on that maneuver.
It's
the day techies and investors have been waiting for: Facebook set a price range
of $28 to $35 per share for its initial public offering. It also upped the
maximum size of its offering to $13.6 billion, up from its previous $5 billion
estimate.
Facebook
currently has around 2.1 billion shares outstanding, so if its IPO prices at
the top of the range, the company would be valued at just shy of $75 billion.
Many
Facebook employees and executives, including Zuckerberg, hold unexercised stock
options. The company itself is also holding some shares for future employee
equity grants. If all of those shares were exercised, Facebook's outstanding
share count would rise to around 2.8 billion, pushing its valuation closer to
$98 billion.
Facebook's
target price range isn't binding, and could change several times before
Facebook actually makes its debut. The company will set its final price the
night before it begins trading. That's expected to happen sometime in mid-May,
with May 18 the current target date.
Institutional
investors who purchase shares directly from Facebook's underwriters, including
lead banker Morgan Stanley, will buy in at the IPO price. Regular investors will
get their shot the next day, when Facebook begins trading on the tech-heavy
Nasdaq exchange under the ticker "FB."
The
target range set on Thursday could be lowballing. Facebook said in a filing
last month that it internally valued its shares at $30.89 each, as of January
31 -- up from $29.73 a month earlier.
Facebook's
user base is growing. The site had 901 million monthly active users as of March
31, up 33% compared to the same date last year. User growth is fastest in Brazil, India,
and the United States,
Facebook said.
Zuck's
windfall: Facebook CEO and founder Mark Zuckerberg plans to sell 30.2 million
shares in the IPO offering. If Facebook prices at the top of its range, that
will net Zuckerberg about $1 billion -- cue the Sean Parker "you know what's
cool?" jokes.
But
Zuckerberg won't be hanging on to his cash. The company said he will use the
"substantial majority" of the windfall to cover the whopping tax bill
he'll be hit with, thanks to his plan to exercise a large stock-options grant
that will substantially increase his ownership stake in the company he founded.
In
2011, Facebook CEO Zuckerberg pulled in a $500,000 base salary. But he
requested -- and will receive -- only $1 per year in salary starting January 1,
2013.
Zuckerberg,
who remains the largest shareholder in the company he created, still takes home
a hefty pay package. His total compensation in 2011 came to $1.48 million,
according to Facebook's calculations.
Facebook,
Inc. is offering 180,000,000 shares of its Class A common stock and the selling
stockholders are offering 157,415,352 shares of Class A common stock. We will
not receive any proceeds from the sale of shares by the selling stockholders.
This is our initial public offering and no public market currently exists for our
shares of Class A common stock. We anticipate that the initial public offering
price will be between $28.00 and $35.00 per share.
Facebook
co-founder and CEO Mark Zuckerberg will personally sell 30.2 million shares for
the IPO. Despite this, he will still control the majority of the company: 57.3
percent of voting shares after the IPO.
But
even after the tax man takes his bite, Zuckerberg will be a paper billionaire.
His remaining 504 million shares will make him worth $17.6 billion if Facebook
hits the top of its IPO range -- enough to make him one of the 50 richest
people on the planet, by Forbes' calculation. Bloomberg has already give him a
spot in its Billionaires Index.
It
will be the Facebook CEO's biggest payday by far, though he has collected
plenty of cash over the years. Last year, he made $483,000 in salary, took home
a $220,500 bonus, and received additional perks like private jet travel valued
at $783,000.