 "Facebook founder to sell shares worth $2.31 bn")
Social networking giant Facebook today said its founder Mark Zuckerberg will sell about 41.4 million 'Class A' shares of the company to raise about $2.31 billion.
Zuckerberg intends to utilise the proceeds from the share sale to fund a tax bill, which will arise out of the firm's Chairman and CEO's move to purchase 60 million 'Class B' shares of Facebook.
Following the share sale, Zukerberg's stake in the California-based social networking site will reduce to 56.1% from 58.8%.
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Facebook is also commencing an underwritten registered public offering of 70 million shares of its 'Class A' common stock.
About 27 million shares are being offered by the firm, while around 42.99 million shares are being offered by some selling stockholders, which includes Zuckerberg.
Facebook shares stood at$ 55.75 apiece in the after hours trading on NASDAQ on Wednesday.
The rights of the holders of 'Class A' common stock and 'Class B' common stock are identical, except voting and conversion rights.
Each share of 'Class A' common stock is entitled to one vote. Each share of 'Class B' common stock is entitled to ten votes and is convertible at any time into one share of 'Class A' common stock.
In a filing to the US Securities and Exchange Commission (SEC) Facebook said: "Facebook is offering 27,004,761 shares of its Class A common stock and the selling stockholders are offering 42,995,239 shares of Class A common stock. We will not receive any proceeds from the sale of shares by the selling stockholders."
On Zukerberg's plans to sell shares, Facebook said in the SEC filing: "In connection with this offering, Mark Zuckerberg will exercise, in full, an outstanding stock option to purchase 60 million shares of 'Class B' common stock and will then offer 41.35 million of those shares as 'Class A' common stock in this offering.
"We expect that the majority of the net proceeds Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur in connection with the option exercise."
On the utilisation of the proceeds from the sale of a total of 70 million 'Class A' shares, the company said it will use the funds to for working capital and other general corporate purposes.
"However, we do not currently have any specific uses of the net proceeds planned. Additionally, we may use a portion of the proceeds to us for acquisitions of complementary businesses, technologies, or other assets," it said in the filing.