Facebook announces £3bn share sale

Post by Richard Morris on 2nd February 2012
 in Finance, Social media

Social media pioneer Mark Zuckerberg stands to make a personal fortune of nearly £14.5billion as a result of plans just announced to offer shares in part of his Facebook company.

Zuckerberg and a group of close friends are expected, however, to retain their remaining 57 per cent stake in the company, meaning that he will remain one of the most powerful men in Silicon Valley.

The Financial Times reports that this means that "he will be able to run Facebook more like the mission-driven public trust he envisioned in his Harvard dorm room eight years ago, than a public company beholden to investors".

Zuckerberg maintained in a letter to investors contained in documents submitted to the New York Stock Exchange that: "Facebook exists to make the world more open and connected, and not just to build a company".

A more interesting part of yesterday's announcement was probably the first disclosure about how much money Facebook earns. It broke the $1billion barrier for net income for the first time last year, a rise of nearly two-thirds over 2010, while total revenue had leapt by 88 per cent in 2011.

Advertising accounted for 83 per cent of its total revenue, while user fees from Zynga, the social gaming site integrated into the Facebook platform, brought in another 12 per cent of the total.

The FT also reported that several of Facebook's early employees will be worth billions as a result of the sale, including two of Zuckerberg's co-founders, Dustin Moskovitz and Eduardo Saverin, and the company's first president, Sean Parker.