Zuckerberg to sell shares to help pay taxes

Facebook CEO Mark Zuckerberg is selling the social networking company's shares to help pay taxes.

Zuckerberg, along with Facebook board member Marc Andreessen would offer around 3.9 billion dollars, which would include 27 million Facebook shares as also additional 41.35 million shares by the CEO.

The sale, according to the first since the company's public debut in May last year, was expected to raise $3.9 billion dollars.

Facebook was set to join the Standard and Poor's 500 Index, an event that led to demand from index funds and other institutions for owing the company's stock.

ANI quoted Highmark Capital's Todd Lowenstein as saying it was never a positive sign when insiders were dumping massive quantities of stock.

However, he pointed that the company was now joining the S & P 500 Index and there would be large demand for the shares from money managers and the latest move would be accepted without much disruption.

The proceeds would be used by Facebook, for working capital and other corporate purposes, even as Zuckerberg used the majority of his proceeds to pay taxes that he would incur in connection with his exercise of an option to purchase 60 million shares, the report added.

The sale by Zuckerberg would see his voting power reduce to 56.1 per cent from 58.8 per cent, the company said in a filing yesterday.

According to Facebook, it expected Zuckerberg to use most of the net proceeds from the sale to satisfy taxes related to the exercise of an option to buy 60 million Class B shares, the report said.

While each Class A share is entitled to one vote, Class B shares are entitled to 10 votes and may be converted any time into Class A share.

Board member Marc Andreessen, too would sell 1.65 million Class A shares, even as Facebook sold 27 million.