By Kim-Mai Cutler
Facebook’s (FB) early investors and employees may sell up to $5.5 billion alongside the company’s offering. Facebook said today that it is selling 180 million shares of stock at $28 to $35 a share. On top of that, other stockholders are selling 157,415,352 shares. Those proceeds will not go to Facebook.
Chief executive Mark Zuckerberg is selling 30.2 million shares, or up to $1.05 billion, which will mostly go toward settling the multi-billion dollar tax bill he’ll face when he exercises his options. Zuckerberg has an outstanding stock option to purchase 120,000,000 shares of Class B common stock at a strike price of 6 cents. He’ll exercise half of it. That’s why he needs to sell 30.2 million shares to cover the taxes.
Even so, he’ll still have 57.3% voting control over the company, thanks to an extra 470 million shares over which he has “irrevocable proxy.” That means that while other people own those shares, they’ve given up the votes tied to them to Zuckerberg.
Zuck’s not the only one selling shares either. So are Accel’s Jim Breyer*, Peter Thiel, LinkedIn (LNKD) founder Reid Hoffman and Zynga (ZYNG) CEO Mark Pincus. Then there are the institutional entities like Accel* and DST. In fact, it’s Breyer and his firm Accel that are walking away with the biggest immediate payday from the IPO.
Who’s not selling in this offering? Sean Parker, Facebook COO Sheryl Sandberg and Facebook co-founder Dustin Moskovitz.
The last important thing to note is that no one is selling a majority of their stake. Everyone who is selling is giving away somewhere between 1/10th and 1/4 of their stake.
We have the actual table from the S-1 here, and then we have a table calculating proceeds for every major shareholder right below that.
Click to enlarge charts
*Note: The amount sold by Breyer in the second line conflates shares that he personally owns and shares that his fund Accel Partners owns.