Facebook founder, Chairman and CEO Mark Zuckerberg, center, rings the opening bell of the Nasdaq... [+]
Investors who missed out on Facebook's May 2012 IPO have another chance to get in on the action: the social media company announced Thursday morning that it and its shareholders -- including founder and CEO Mark Zuckerberg -- are selling a total of 70 million shares of its Class A common stock. However, if early market activity is any indication, existing Facebook investors aren't rushing to hit the "like" button on the news: shares of the social media giant fell 4% in pre-market trading after the announcement.
In preparation for its inclusion on the S&P 500, Facebook said that it will sell a little over 27 million shares, while certain stockholders are selling 43 million shares. The bulk of the shareholder sale comes from Zuckerberg, who is selling over 41 million of his shares -- a stake worth nearly $2.3 billion given Facebook's over-$55 share price.
Facebook said in a Thursday morning press release that its Class A shares will primarily be offered to index funds whose portfolios are based on stocks included in the S&P 500. At the close of trading on December 20, 2013, Facebook will join that index.
In an SEC filing disclosing the sale, Facebook did not provide specific details about the use of the proceeds from the stock sale, saying only, "Our principal purpose for selling shares in this offering is to obtain additional capital. We intend to use the net proceeds to us from this offering 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."
Facebook also said that the majority of Zuckerberg's net proceeds will be used to satisfy taxes that he will incur by exercising a stock option to purchase 60 million shares of Facebook Class B common stock.
After the sale, Zuckerberg's existing 58.8% voting power will tick down to 56.1%. He will still own more than 444 million shares of his company after the sale is complete.
Venture capitalist and Facebook board member Mark Andreessen is among the other shareholders selling stock in the offering. Andreessen -- who ranks second on FORBES' Midas List -- is selling a little over 1.6 million shares, a stake worth nearly $89 million.
Following the news of the sale, shares of Facebook initially dipped 4% in Thursday's pre-market activity, but recovered a bit as the opening bell drew closer. Year-to-date, Facebook has seen 98.6% growth.
