Mark Zuckerberg sells 30.2 million shares of $FB common stock at $37.58

http://www.sec.gov/Archives/edgar/data/1326801/000120919112029812/xslF345X03/doc4.xml

by bond • 14 years ago

279 160 14 years ago

jsavimbi2• 14 years ago

He needs walking around money. So what?

Well, a billion is a lot of walking around money. If he just cashed out for no particular reason, it would point to a lack of faith in the growth prospects for Facebook. After all if you owned a billion dollars of a stock that you thought was a rocketship, wouldn't you leave it in and turn it into five or ten billion?

Of could it could be he wanted to spread his risk around, or pay his taxes.

_wp3r2• 14 years ago

To be specific HE did not cash out. An independently managed PAT cashed out.

cavilling_elite• 14 years ago

Not if you don't care anything about the stock price or money. He just made 1.13 bln dollars for his company. If he invests it directly in fb related growth he no longer has to worry about what NASDAQ does. He's making fb independent of the media fluctuation or the fact that he has shareholders for all. The question becomes, what would you do if you you had a successful company and you were just given 1.13 bln dollars without any strings?

This is just a thought experiment, but I think fb brilliantly played wall-street and now has enough money to build an infrastructure. Internet advertising isn't creative, so what will the "next gen fb" look like? And is it worth investing in, speculating that it means nothing to them.

tensor• 14 years ago

Nobody on earth needs $1B of walking around money.

jsavimbi2• 14 years ago

It would be very cool, though.

keltex• 14 years ago

It was in the S-1 filing, so it's not new news:

http://www.marketwatch.com/story/facebooks-zuckerberg-thiel-...

dlokshin• 14 years ago

Even less of news when he has to make this type of sale to pay taxes.

anamax• 14 years ago

> Even less of news when he has to make this type of sale to pay taxes.

What did he do so he owes taxes?

Exercising in-the-money options is taxable. Receiving stock grants is a taxable event.

Owning stock (or options) in a company that goes public is not a taxable event.

Note that he got to sell (some?) now. Ordinary employees are still in lockout.

danielweber• 14 years ago

I remember back in the 90's that every time Bill Gates sold 1 or 2 percent of Microsoft, people would freak out that Microsoft's collapse was imminent. Even though he did it every six months.

Whatever you think of Facebook, it is extremely prudent for Zuckerberg to diversify. If he had $1 million in non-FB assets, he would still have 99.99% of his assets in Facebook. That's a crazy amount of his wealth concentrated in one stock.

calinet6• 14 years ago

Arguably, that's the whole point in owning stock in the company you own, control, and oversee. You can help make it go up and it's in your complete interest to help it become successful. You have no such control or incentive with other companies.

caf• 14 years ago

...and that's before you take into account that his own personal future earnings potential is also unavoidably correlated with how well Facebook does. Diversification makes complete sense.

slipperyp• 14 years ago

A) it's not "not news" because the intent for this was disclosed in the S-1 B) is this a necessary distinction on hackernews? I'd been under the impression this site is more about discussion about topics of interest to geeks and the odd primary source (such as this SEC link is). Did you write this same comment when Berners-Lee original email proposing the web made the front page?

Cushman2• 14 years ago

You know what's cool? 1.134916 billion dollars.

Hey, who else has finances that look like this?

  Mark Zuckerberg, Trustee of The Mark Zuckerberg 2008 Annuity Trust dated March 13, 2008

_wp3r2• 14 years ago

This is pretty common when someone has a lot of cash that is liable to capitol gains. If you sell the assets to the pat you can pay the taxes over time on the money that is distributed instead of paying the capitol gains all at once and loosing that earning power. You do loose the money in that it you cant use it but you make more money in the long run because you spread the taxes out and make money on the potential tax liability up until it is distributed.

edit: It is the same as not paying any taxes all year on your payroll and putting the money in the market to make the interest you can, and then paying the tax man in April.

edit typo

edit adding typos back in

gee_totes• 14 years ago

I think you mean 'capital', as in capitalism.

Capitol is the building in which a legislature meets. eg: The Capitol Building.

FraaJad3• 14 years ago

replace loose with lose.

See: http://theoatmeal.com/comics/misspelling

ibejoeb4• 14 years ago

Careful. Taxes in the US are pay-as-you-go. You can't just "pay the tax man in April." Well, you can, but you also have to pay him the penalty for failing to pay throughout the year. See http://www.irs.gov/taxtopics/tc306.html.

its_so_on4• 14 years ago

I liked your comment but found it hard to read due to some typos. Imagine my surprise when the end reads...

"edit typo

edit adding typos back in"

what happned here? :)

santa_boy• 14 years ago

It just seems like he wanted to say .. I'm billionaire bch

zerostar07• 14 years ago

He is also trustee of the "Openness Trust"! Kind of ironic when you know what he thinks of people who "Trust" him.

albertsun• 14 years ago

Probably to pay his tax bill, right?

tosseraccount3• 14 years ago

No. His stock was near zero when he acquired (created) them. He'll pay full cap gain rates when he realizes them (which is 15% cap gains rate which is not too bad for him; I pay a lot more on my labor gains). He owes no tax until then. If you received stock worth , say, one million , you might want to sell 1/3 to pay the tax. Otherwise if stock price goes to zero you've got a million in losses to write off which is hard to do without a million in gains to offset it.

nknight6• 14 years ago

That's only partly true. As I recall, he exercised a substantial option (~100 million shares or something like that), half of which were non-qualified and are immediately taxed as ordinary income, so he's got a big tax bill coming and probably will keep less than half of what he just cashed out.

its_so_on4• 14 years ago

(EDIT: I don't know anything about this subject, the below is only a naive question. See response.)

are you sure about this. to me it's pretty obvious that if you receive a million dollars in stocks and, say, 48 hours later it goes to 0, then insofar as you owed taxes on the million due immediately, you have also just lost a million in taxable income; so you write the million loss off of the million in gains for net 0 increase or decrease in your taxable amount due to this gain-and-loss.

I know the IRS can be daft, but surely if you lose the exact amount you just got, then you've just netted nothing, taxable at your marginal tax rate on that gain for that type of gain, times nothing = nothing.

jws2• 14 years ago

…15% cap gains rate which is not too bad for him; I pay a lot more on my labor gains

For people that feel that the capital gains crowd gets special treatment…

How would you be with waiting 8 years for each paycheck, or being paid now in 2004 dollars ( paid 82 cents for each dollar you earn)?

Part of the long term capital gains reduction is a crude compensation for inflation. In this case it fails miserably because of the ludicrous ratio between profit and investment, but in the more normal case where you might make 40% while inflation came up 25% it achieves a sort of balance between tax and inflation's erosion of capital.

ck2• 14 years ago

Every three cents more per share would have been another million dollars.

knodi2• 14 years ago

I thought employees of facebook can't sell for 6months after the IPO. Is this not true?

ceejayoz2• 14 years ago

Key word: employees.

knodi2• 14 years ago

Isn't CEO technically still a employee of the company.

heelhook• 14 years ago

Nope, 90 days. And Mark, and a bunch of early players, like Eduardo Saverin, GS and others sold during the IPO.

blahedo• 14 years ago

I figured that's why he held on to >50.1%, so he could sell some and still maintain control.

kristianc2• 14 years ago

His Class B shares should take care of maintaining control.

tosseraccount3• 14 years ago

The FB shares aren't voting shares or are extremely diluted voting shares? This is the same scam Google and UPS pulled. Beware of owning second class stock shares. It means that someday the insiders can wave a magic wand and screw you over. Do you trust them? Maybe. But it doesn't mean they can't do what they want and "share holders" can't do a thing about it.

tferris2• 14 years ago

This is really strange.

Such a move should be prepared carefully and when executed then immediately explained with a press release.

Mark doesn't believe in FB.

squarecat3• 14 years ago

For better or worse, the man has never exercised traditional business practices.

lwhi• 14 years ago

For better or worse, the man has never exercised ethical business practices.

(there you go, fixed it for you... )

squarecat3• 14 years ago

And here I thought I was really beginning to understand how and when to engage in the discussion, yet the HN demigods seem to be proving me wrong more often than not lately...

astrodust2• 14 years ago

This is really common. One reason you IPO is to monetize your investment in the company.

Bill Gates and Paul Allen have been selling off chunks of shares for decades and it's not like they don't believe in Microsoft.

brooksbp• 14 years ago

This could be a good thing. Liquidating wealth means opportunity for charity or other investments.

sliverstorm• 14 years ago

Yup. Twenty billion in shares is just a number in a book somewhere if you never sell.

tedivm• 14 years ago

No, this was actually the plan since the beginning, before IPO. They had a filing with the SEC stating they were going to do this (Peter Thiel also sold 16.8 million of his shares as part of this).

tferris2• 14 years ago

Ah ok, good info!

Tyrannosaurs• 14 years ago

Yeah, you're right, his stake in it is only $18bn or so after this.

What sort of half hearted investment is that?

rdl• 14 years ago

I believe most of that was sold specifically to pay the taxes he owed. Not all of his holdings were just subject to long term capital gains (deferred until realization). Some were some kind of RSU or option like deal which were taxable at the IPO.

lo_fye• 14 years ago

Is he still the majority shareholder? Does this make him accountable to the board, now? Maybe he did it both for the $, and as a show of goodwill toward the board, after that whole "Kiss my butt, we're buying Instagram" thing.

JustNick3• 14 years ago

Right decision, FB shares low for today was 31$ now 32. One news from him that he bought this shares at 31, and market will go up. Than sell again at 45 :)

He wants to become a stock trader :D

fredoliveira• 14 years ago

He didn't buy at $31. He sold 30.2M shares.

sirclueless• 14 years ago

I think you misunderstood. Fred is suggesting that Mark is smart for cashing out at $37 because the price is now $31. He also thinks that if Mark buys stock at $31 that will be a strong enough signal to send the price to $45. That seems a bit of a stretch to me but it's just a hypothetical situation, not a statement of fact.

JustNick3• 14 years ago

Yes, he sold at $37.58 than price moves up, than 31$ and for markets news, that he bought shares at 31 back, can possibly be a big catalyst for growth. That's just a joke, i suppose this was not his purpose, but this "move" could be a big biz.

dageshi• 14 years ago

Ummm does anyone else think that maybe Mark Zuckerberg is now going to be filling the Steve Jobs shaped hole in the worlds tech publications?

AVTizzle• 14 years ago

>> the Steve Jobs shaped hole

Hahahaha. That's a funny thought.

But now that you mention it, yes. Though maybe with a slightly less endeared/worshipping sentiment.

RandallBrown• 14 years ago

Yes and no. I think he is a visionary CEO that knows how to get things done, but he's an engineer, while jobs was not.

I think that Jeff Bezos is more Jobs than Zuckerberg is, but who knows.

Retric• 14 years ago

Jobs did work for Atari, and they trusted him enough to do design circuit boards so IMO he was probably a competent electrical engineer. However, he did use Wozniak who was ridiculously good at circuit design so he could focus on other things. Still IMO, that's like having Einstein help with your math homework if it's an option you take it.

flexterra• 14 years ago

I think pretty soon the "Steve Jobs shaped hole" will be filled by Jack Dorsey

jskopek• 14 years ago

At the risk of feeding a silly discussion, I'd cast my vote to Elon Musk

tomelders2• 14 years ago

I'm going to say no. I really don't see Facebook being around in 30 years. I'd be surprised if they're not marginalised in 10 years. And other than Facebook, I'm not sure what Zuckerberg has to offer the world.

If you want to know why: It's because I personally believe the future of social networks is to niche, with disparate social networks connected via a Distributed Social Networking Protocol. Your social network account will be more like your email account. I think Facebook will find itself on the wrong side of history when that battle starts by trying to lock down it's data and lock people into Facebook.

That's just my belief and I'm open to the possibility that it could be completely wrong, so don't go crazy with the down votes.

But if we're just talking about the next 12 to 24 months, then, oh yes, of course he will.

thafman• 14 years ago

I'm a massive proponent of the Distributed Social Networking Protocol concept, but since Diaspora tanked no one else seems to be picking up the mantle and Google/Yahoo/Microsoft don't look like they're going to roll out anything resembling an open SN protocol any time soon I wonder if it will ever happen.

mukaiji• 14 years ago

There's certainly a lot of truth here. However, Mark Zuckerberg built the company to last. So I think it's unlikely that it will completely be marginalized.

Regarding the Zuck = Jobs. Absolutely not. Yes, they are both product people. But Mark Zuckerberg does not have the same aura or doesn't necessarily have the same depth of intellectuality that Jobs (college dropout or not) had. When I see Mark Zuckerberg, I think more of the Bill Gates or our time than an artistic genius with deep root in counter-culture lifestyle.

Kuiper• 14 years ago

I personally believe the future of social networks is to niche, with disparate social networks connected via a Distributed Social Networking Protocol.

This sounds a lot like the subreddit system.

creamyhorror• 14 years ago

I've been hoping for such a platform to emerge - it would be better than having a single platform that everyone uses. People could switch between SN providers (like email providers) easily, with migration capabilities offered via APIs, and then there would be room for SNs to compete for fairly and for smaller, better players to emerge more easily.

Please make it happen, someone. No doubt a lot of people dislike being locked into long-term contracts with service providers, be they cellphone, cable, email or social networking services.

koglerjs• 14 years ago

Have you seen him speak? No.

tbeseda• 14 years ago

Correct. He's more similar to the still occupied Bill Gates shaped hole.

alvarosm• 14 years ago

I'd sell all of it and move on. Most boring business ever. And it's not like it's going to be worth more, ever, anyway.

foxhop2• 14 years ago

30200000 * 37.58 = $1,134,916,000.00

Didn't Mark spend 1 Billion on the Instagram acquisition?

Did he pay them off with equity? Why did he spend so much on instagram?

dsl2• 14 years ago

Mark Zuckerberg didn't buy Instagram. Facebook did. They are not the same.

foxhop2• 14 years ago

It was Facebook's money, sure, but Mark bought instagram. Do you have insight on my questions?

ahalan• 14 years ago

what's his email? I have a great idea for a new startup

mjhagen• 14 years ago

thezuck@hotmail.com

csmeder• 14 years ago

Is the question and answer an inside joke? I don't get it.

huslage• 14 years ago

So what.

rafkin98• 14 years ago

http://www.cnbc.com/id/47537683

cjdentra• 14 years ago

Let's hope that Mr. Zuckerberg does something for the greater good. Opportunities are limitless.

mladenkovacevic• 14 years ago

Good for him. Will he be as driven and as emotionally invested in his product as he used to be now that he's officially a billionaire? Just got married, maybe kids on the way soon, and he's got the means to lead a much more comfortable life... will Facebook slide down on his priority list?

a3d6g2f74• 14 years ago

Selling off significant amounts of stock, for tax purposes, in the company you work for is not something one typically does _before the company has even gone public_.

Insiders were dumping their stock in the days leading up to the IPO.

What does that say about their perceived value of the company over the long-term?

Nothing, of course. Yes, that makes perfect sense.

SagelyGuru• 14 years ago

Dividing the FB valuation by the number of its active users tells us that he has made approximately $170 out of each user.

mck-• 14 years ago

On the day of the transaction, the stock was trading around 32 with the day high at 33.57 -- how was he able to offload half of a trading days volume at such a premium?

shaydoc• 14 years ago

ya see, this is what I don't get about capitalism sometimes.

I mean what do you do with such an astronomical figure of money like that as an individual ?

eatporktoo• 14 years ago

Nearly anything you want

rwebb• 14 years ago

WTF is a COB?

sirteno2• 14 years ago

In my opinion, Mark Zuckerberg's decision is a prudent and rational one. He is diversifying a heck of a lot of exposure away from a stock that is now at the mercy of the public equity markets. Besides, in relative terms, he is still retaining the vast majority of his wealth tied to Facebook stock.

His performance as a CEO is essential to ensuring solid performance for the company, but the stock price - like every other public share - is now at the mercy of macro variables that affect the performance of the equity markets as a whole...

Mark Zuckerberg is being prudent in diversifying a fraction of his exposure away not just from FB, but also from the asset class and perhaps even the currency / country.

C'mon, is anyone here willing to admit that they would not cash-out a small fraction of $18 bn tied to a single stock if you had the ability to do so??

duncan• 14 years ago

Not news.

Mark Zuckerberg sells 30.2 million shares of $FB common stock at $37.58

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