Facebook CEO Mark Zuckerberg will sell shares worth about $2.3 billion US in the social networking company he founded, as part of an offering of common shares by the company.
His sale of about 41.4 million shares reduces his total stake in the Menlo Park, Calif., company from 65.2 per cent to 62.8 per cent, according to a U.S. Securities Exchange Commission filing.
The filing says Zuckerberg will use most of the proceeds to pay taxes he will incur as a result of 60 million Class B shares he will receive by exercising his stock options. Some will be given to charity.
The sale of shares at year end is a common strategy to offset gains or losses that will fall within the current financial year.
Each Class A share is entitled to one vote, while Class B shares are entitled to 10 votes and are convertible at any time into one Class A share. Zuckerberg plans to convert 41.4 million of his Class B shares to common stock to sell them.
Facebook is making a secondary offering of 70 million shares, including Zuckerberg's shares, as it prepares to join the Standard & Poor's 500 index.
The company said the Class A shares will be offered mainly to index funds whose portfolios are based on stocks included in the index.
After listing at $38 US in May 2012, Facebook shares stood at $55.51 Wednesday evening. On Thursday morning, they opened for trading at $54.33, having fallen four per cent overnight, mainly on the news that Zuckerberg would sell shares.
Standard & Poor's equity analyst Scott Kessler noted that Zuckerberg's ownership has declined "only slightly" since Facebook's May 2012 initial public offering, and that the planned sale "would only minimally reduce his stake and voting power."
"We are not concerned by this news," Kessler said in a note to investors, reiterating a "Buy" rating on Facebook's stock.
Facebook stock was down 60 cents at $54.98 at the end of trading Thursday.
Board member and venture capitalist Marc Andreessen will also sell 1.65 million Class A shares worth about $89 million.
Facebook plans to sell 70 million Class A common shares.