Launched in February 2004, Facebook is a social networking service founded by Mark Zuckerberg with his college roommates and fellow students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. Early investors include Microsoft and Hong Kong tycoon Li Ka- shing, through his namesake charitable foundation. Facebook’s US$16 billion initial public offering in May 2012 generated huge investor interest although the shares subsequently slumped in price.
Facebook, Zuckerberg plan to sell 70m shares
Mark Zuckerberg, the chief executive of Facebook, is selling shares to help pay taxes, joining the company and some other shareholders in an offering worth about US$3.9 billion.
About 27 million shares would be offered by Facebook and almost 43 million shares were being sold by stockholders, including 41,350,000 shares by Zuckerberg, the company said yesterday. Facebook shares fell up to 5.3 per cent in pre-market trading on the news.
The follow-on sale is the first that Facebook has filed for since its initial public offering in May last year. Expectations of the sale raising US$3.9 billion are based on the stock's last closing price.
Facebook said it would use the proceeds for working capital and other corporate purposes while Zuckerberg will use the majority of his proceeds to pay taxes he will incur in connection with his exercise of an option to purchase 60 million shares.
"We do not currently have any specific uses of the net proceeds planned," Facebook said in the statement. "We may use a portion of the proceeds to us for acquisitions of complementary businesses, technologies or other assets."
Facebook is testing video advertisements that automatically play in users' news feeds, in a bid to catch up with other websites offering online commercials. The first promotions were starting to run this week, the company said this week.
Meanwhile, US district judge Robert Sweet in Manhattan ruled in an opinion dated December 11 that Facebook and the underwriters of its listing must face a class-action lawsuit by investors claiming the company misled them about its financial condition.
Judge Sweet rejected arguments by Facebook and banks including Goldman Sachs that investors were adequately warned about the effect increased use of mobile devices might have on revenue.