Facebook to sell 3.9 billion dollars in shares for the first time since IPO

Mark Zuckerberg – the Chief Executive Officer of Facebook Inc. plans to sell companys shares in order to pay taxes in an offering estimated about 3.9 billion dollars. As reported by Bloomberg, Facebook will offer about 27 million shares, with an additional 41.35 million shares by Zuckerberg and 1.6 million from the board member Marc Andreessen. This was officially announced yesterday in a statement made by the company.

The sale would be the first one Facebook has filed since the initial public offering in May last year. It could help the company gather about 3.9 billion dollars, based on the yesterdays closing price of the companys shares. This move came just a day before the long-expected join of Facebook to Standard & Poors 500 Index, which certainly increases the index funds and different institutions demand for companys stock. Standard & Poors announced its plans for including Facebooks Class A common stock in its 500 Index at the close of trading on December the 20th 2013.

Highmark Capitals portfolio manager Todd Lowenstein said on this occasion: “Its never a positive sign when insiders are dumping massive quantities of stock. The company is now being added to the S&P 500 Index so there will be large demand for the shares from index buying and index hugging money managers. So it seems this will be absorbed without much disruption.”

The profits are planned to be used for working capital and other corporate purposes. Facebooks Chief Executive Officer is expected to use the majority of his proceeds in order to pay taxes. The company explained: “We do not currently have any specific uses of the net proceeds planned. We may use a portion of the proceeds to us for acquisitions of complementary businesses, technologies, or other assets.”

Zuckerberg has sold or gifted about 20% of his Facebook stake. A spokeswoman of Facebook refused to make any more comments beyond the companys official statement.

According to CNN Money, the current share price of Facebook Inc. is 0.94% down, and its one-year return rate is 106.80% up. The 39 analysts offering 12-month price forecasts for Facebook Inc have a median target of 60.00, with a high estimate of 72.50 and a low estimate of 42.00. The median estimate represents a +8.99% increase from the last price of 55.05.