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Zuckerberg cashes in

May 06 2012 12:00
San Francisco - Facebook's debut on Wall Street will make 27-year-old co-founder Mark Zuckerberg a multi-billionaire, with firm control of the world's leading online social network.

After Facebook's initial public offering of stock, Zuckerberg will own 57.3% of the hot Silicon Valley company in a stake valued at more than $15bn based on how shares are expected to perform.

"Because Mr Zuckerberg controls a majority of our outstanding voting power, we are a 'controlled company' under the corporate governance rules for Nasdaq-listed companies," Facebook said in an amended filing with the US Securities and Exchange Commission (SEC).

Zuckerberg will immediately sell 30.2 million shares, with a projected value of about $1.05bn, with the bulk of the money going to pay taxes on 60 million shares he will be acquiring for a pittance by exercising stock options.

Facebook employees and investors are expected to cash-out to the overall tune of $5.5bn by selling stock when the company begins trading on the Nasdaq in a debut slated for May 18.

A regulatory filing calls for shares to be priced between $28 and $35, which would set a company value below some estimates of $100bn for the world's biggest social network.

At the midpoint of the price range, the sale of 337 million shares would generate $10.6bn, making Facebook's offering the largest IPO of a tech firm and one of the biggest on US soil.

"Facebook was not originally founded to be a company," Zuckerberg said in a letter included in SEC paperwork.

"Most great people care primarily about building and being a part of great things, but they also want to make money," he continued.

"Simply put: we don't build services to make money; we make money to build better services."

A video released as part of a roadshow to woo investors featured Zuckerberg casually discussing Facebook and its vision.

"In middle school I used search engines like Google and Yahoo! and I just thought they were the most amazing thing," Zuckerberg said.

"The thing that seemed like it was missing was always just people," he continued.

"The most interesting stuff that you care about the most is actually what's going on in the lives of your friends, or the people around you."

Facebook's stock market debut will be the latest chapter in the life of the New York-born computer prodigy who has become a Silicon Valley legend.

Zuckerberg has been the subject of Hollywood blockbuster The Social Network, Time's Person of the Year, and cracked the Forbes list of the 20 richest people in the world.

Despite it all, Zuckerberg still sports t-shirts, jeans and sneakers, his trademark hoodie and a mop of brown, curly hair.

Born on May 14 1984, Zuckerberg was raised in Dobbs Ferry outside New York, one of four children of a dentist father and a psychiatrist mother.

Zuckerberg began writing computer programs at the age of 11 and went to high school at the prestigious Phillips Exeter Academy, where he was captain of the fencing team, before entering elite Harvard University.

He launched, as it was then known, from his Harvard dorm room on February 4 2004, with roommates and classmates Dustin Moskovitz, Chris Hughes and Eduardo Saverin.

The stated goal then was the same as it is today: "Making the world more open and connected."

Zuckerberg left Harvard in May 2004 for Silicon Valley, where he received his first major funding - $500 000 - from PayPal co-founder Thiel followed by nearly $13m the next year from Accel Partners.

Despite recurring privacy complaints, Facebook has gone from strength to strength, growing from 50 million members in 2007 to more than 900 million today.

"At Facebook, we're inspired by technologies that have revolutionised how people spread and consume information," Zuckerberg said in his letter.

"We live at a moment when the majority of people in the world have access to the internet or mobile phones - the raw tools necessary to start sharing what they're thinking, feeling and doing with whomever they want," he continued.

"Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries."
wall street  |  facebook



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