Facebook Inc. has boosted the size of its IPO by almost 25 per cent, but the company is not actually planning to sell any more shares. Instead, the increase will come from early investors, directors and top executives selling even more of their own shares.
It appears that the approximate $104-billion (U.S) valuation that Facebook is likely to get when it launches on the Nasdaq market Friday is too rich for many insiders to pass up.
Among the sellers, Peter Thiel is more than doubling the amount of shares he will sell. In a filing with U.S. regulators on Wednesday (page 142), the venture capitalist said he planned to sell 16,844,315 shares, up from the 7,748,385 listed in the previous filing just a day earlier.
Another VC, James Breyer, has increased his offering to 49,031,249 shares, up 28 per cent from 38,189,423.
Cofounder, chairman and CEO Mark Zuckerberg has not increased the number of shares that he is prepared to sell. He has offered to sell 30,200,000 shares in the IPO, with the majority of the proceeds going to pay taxes, the filings say.
As a group, Facebook’s 12 executive officers and directors are increasing the number of shares they plan to sell by more than 60 per cent, to 189,369,144 from 117,026,370.
So what does that say for investors buying Facebook on the secondary market beginning Friday? Draw your own conclusions.