Facebook Announces Proposed Follow-On Offering

RMN Digital | December 19, 2013 | Americas, Corporate, Finance, Regions, Social, Social Media | No Comments

Social networking company Facebook, Inc. (NASDAQ: FB) today announced that it is commencing an underwritten registered public offering of 70,000,000 shares of its Class A common stock.

A total of 27,004,761 shares are being offered by Facebook, and a total of 42,995,239 shares are being offered by certain selling stockholders, including 41,350,000 shares offered by Mark Zuckerberg.

Standard & Poor’s, a division of McGraw-Hill Financial Inc. (S&P), has announced that, effective as of the close of trading on Dec. 20, 2013, it plans to include Facebook’s Class A common stock in the S&P 500 Index, which is comprised of 500 common stocks that S&P selects.

[ Also Read: Mr. Mark, I Am Fed Up with Your Facebook ]

Shares of Facebook’s Class A common stock will be offered primarily to index funds whose portfolios are primarily based on stocks included in the S&P 500 Index.

Facebook intends to use the net proceeds of the offering for working capital and other general corporate purposes.

According to the company, Facebook will not receive any proceeds from the sale of shares by the selling stockholders.

[ Also Read: Look Mark, Who Is Using Your Facebook ]

Facebook expects that the majority of the net proceeds Mr. Zuckerberg will receive upon the sale of shares in the offering will be used to satisfy taxes that 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. BNP Paribas, Citigroup, RBC Capital Markets, Credit Suisse, HSBC, Standard Chartered and Piper Jaffray are serving as co-managers for the offering.