Facebook joins S&P 500, prices $3.8 billion stock offering
Bloomberg / David Paul Morris
Facebook CEO Mark Zuckerberg.
Facebook (NASDAQ: FB) joined the Standard & Poor's[6] 500 list Friday afternoon as it priced a $3.8 billion stock offering that included a $2.27 billion sale by Mark Zuckerberg[7], the social network's co-founder and CEO. Most of what Zuckerberg receives will go to taxes.
The S&P[8] 500 Index is comprised of 500 common stocks selected by S&P, which is a division of McGraw-Hill Financial[9].
In the stock sale, expected to close Dec. 26, Facebook is offering 27 million shares total, Zuckerberg is selling 41.3 million shares and other stockholders are selling another 1.7 million shares. The majority of Zuckerberg's proceeds will go to taxes for excercsing an outstanding stock option to purchase 60 million shares of Class B common stock, the company said.
Shares of Facebook's Class A common stock will be offered primarily to index funds with portfolios tat are primarily based on stocks included in the S&P 500 Index.
Standard & Poor's had announced earlier in the month that it would add Facebook to its 500 index. Doing so often bumps up a company's share price temporarily as mutual funds and exchange-traded funds tracking the indices are required to invest in the company. Facebook
Facebook has also replaced The Williams Cos. in the S&P 100 index of the very largest U.S. companies.
Patrick Hoge covers technology for the San Francisco Business Times.
References
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