Facebook announced on Thursday that it is offering 70,000,000 new shares of its Class A common stock, with 27,004,761 shares being offered by the company itself and 42,995,239 shares being offered by certain selling stockholders, including CEO Mark Zuckerberg, who is offering 41,350,000 shares.
The company plans to use the net proceeds from the offering for working capital and "other corporate purposes." The company won't receive any proceeds from the sale of shares by stockholders, but expects that the majority of the net proceeds Zuckerberg will receive "will be used to satisfy taxes he will incur in connection with his exercise, in full, of an outstanding stock option to purchase 60,000,000 shares of Class B common stock."
J.P. Morgan, BofA Merrill Lynch, Morgan Stanley and Barclays are serving as joint bookrunners for the offering, with BNP Paribas, Citigroup, RBC Capital Markets, Credit Suisse, HSBC, Standard Chartered and Piper Jaffray serving as co-managers.
Starting at the close of trading on Friday, Standard & Poor's plans to include Facebook Class A common stock in the S&P 500 index. Shares will be offered primarily to index funds whose portfolios are based on stocks included in the index, Facebook says.
Facebook stock is on the decline in pre-market trading.
On Thursday, a judge ruled that Facebook and numerous banks will have to face a lawsuit alleging that the company misled investors about its health ahead of its IPO.
Reuters shares a statement from Facebook: "We continue to believe this suit lacks merit and look forward to a full airing of the facts."
Image: Mark Zuckerberg