Facebook Founder Zuckerberg Controls Destiny and Could Surpass Google Guys in Wealth
The much anticipated Facebook (FB) IPO has been set in motion as the world’s most popular social media site filed its first documents with the U.S. Securities and Exchange Commission (SEC) yesterday evening.
The filings find that while Facebook founder Zuckerberg has a 28.4 percent stake, he will retain effective control under a share structure that gives him voting rights to 56.9 percent of the equity. Even in matters requiring stockholder approval (with Zuckerberg owning less than the majority of shares), this structure gives him the control.
Other filings highlights: Zuckerberg will remain in control of all major decisions such as the election of directors, mergers and the selling of assets. He will also be able to choose his successor at the time of his death.
Mirroring Rupert Murdoch’s model with News Corporation (NASDAQ:NWS), Zuckerberg’s Class B shares each carry ten votes, whereas the Class A shares being offered at IPO will have just one vote a piece.
The documents also disclosed details of Facebook’s rapid growth, citing revenues at $3.7 billion last year up from $777 million in 2009, and profits that almost quadrupled over the same period. The company did not reveal details of the IPO’s target price, but its expected to value the company at up to $100 billion.
In 2011, Mr. Zuckerberg, 27, received a base salary of $500,000 with a total compensation of $1.48 million, but he will take only $1 a year starting in 2013, following in the footsteps of Apple (NASDAQ:AAPL) founder Steve Jobs.
Richer than the Google Guys
Mark Zuckerberg, founder and CEO of Facebook Inc. (FB), has the potential to become more affluent than Google Inc. (NASDAQ:GOOG) co-founders following the company’s upcoming initial public offering. Zuckerberg holds the most shares with 28.4 percent and controls 56.9 percent of voting power. Zuckerberg’s stake in Facebook will amount to $28.4 billion.
The company is discussing a valuation of $75 billion to $100 billion, and believes it will raise around $5 billion with the IPO. There will be a lock-up period where shareholders will not be able to sell their shares, which could last as long as six months.
Accel Partners invested $12.2 million in Facebook in 2005 and sold 17 percent of its stake last year. Accel still owns about $11.4 billion of Facebook stock. Russia’s Digital Sky started investing in Facebook four years after Accel and now owns about 5.5 percent of Facebook.
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