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Mark Zuckerberg sells 30.2 million shares of $FB common stock at $37.58
- jsavimbi 14y agoHe needs walking around money. So what?
- deleted 14y ago[deleted]
- hendzen 14y agoHe still has much, much more tied up in facebook. The fact that he's diversifying his holdings shouldn't be held against him; any reasonable person would do the same to hedge against a possible decline of the entire technology sector in the event social media company valuations face some sort of "correction". Also, anyone with that much money in equities has to worry about broader macroeconomic issues such as the current problems in Greece and the rest of the Eurozone. Once again, Zuckerberg isn't doing anything that should be held against him. He still has most of his eggs in the facebook basket; he's merely being prudent.
- conradfr 14y agoWith that much money I would just retire and travel or pull a Bill Gates.
- gwern 14y agoThe sort of person that faced with ownership of Facebook would say he would just retire and travel and dabble in philanthropy is also the sort of person who would sell out of a Facebook for $500m a few years earlier, $100m a year or two before that, $50m months before that...
- JoachimSchipper 14y agoBill Gates is hardly "dabbling" in philanthropy, though. When you try to eradicate a major disease as the first step of your long-reaching plans, you get to use nicer words than "dabbling".
- gwern 14y agoI wasn't intending to describe Bill Gates (although his fortune is currently $60b which is 60x what Zuckerberg apparently has in the bank and bigger than IIRC his holdings of Facebook), but most billionaires don't seem nearly as serious or careful about their philanthropy as Gates. Take Zuckerberg - he's not off to a good start with just donating millions to schools; that's not going to change anything like Gate's "let's eliminate polio forever" would.
- loceng 14y agoIt's not worth $108 billion, it never was - never will be. This was a scam. A Ponzi Pyramid Scheme. A cash-grab. http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme
- jbigelow76 14y agoI think we are going to need a new term for legitimate ponzi schemes to help identify them now that anything somebody doesn't agree with: FB, social security, socialized medicine, unions, groupon, quantitative easing, bailouts, unicorns, etc... are now routinely written off as "ponzi schemes".
- debacle 14y agoUnicorn futures are a well known ponzi scheme.
- clarky07 14y agono kidding. ponzi scheme is pretty easy to define. overvalued stock is not ponzi, it is just an overvalued stock. ponzi is paying earlier "investors" with the money of later "investors". Under that definition, only social security from your list fits even close.
- thrownaway2424 14y agoWell, 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.
- frankydp 14y agoTo be specific HE did not cash out. An independently managed PAT cashed out.
- cavilling_elite 14y agoNot 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 14y agoNobody on earth needs $1B of walking around money.
- jsavimbi 14y agoIt would be very cool, though.
- keltex 14y agoIt was in the S-1 filing, so it's not new news: http://www.marketwatch.com/story/facebooks-zuckerberg-thiel-sell-shares-2012-05-22 http://www.marketwatch.com/story/facebooks-zuckerberg-thiel-...
- dlokshin 14y agoEven less of news when he has to make this type of sale to pay taxes.
- anamax 14y 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.
- guimarin 14y agohe excercised twice as many shares.
- otterley 14y agoDoes anyone know why, as a Facebook employee, Mark Zuckerberg is not subject to the same 90-day lockup period for disposing of his shares on the public market as the rest of the employees? EDIT: The lock-up period isn't an SEC requirement; it's an agreement made with the underwriters. The S-1 filing states: "Morgan Stanley & Co. LLC may, in its sole discretion, permit our executive officers, our directors, and the selling stockholders to sell shares prior to the expiration of the restrictive provisions contained in the “lock-up” agreements with the underwriters." And it looks like they let him do just that.
- te_chris 14y agoHe's CEO, bitch? (sorry), but maybe other directors were allowed to as well? I imagine my first answer is sadly not far from the truth..
- Cushman 14y agoYou 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
- frankydp 14y agoThis 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
- albertsun 14y agoProbably to pay his tax bill, right?
- tosseraccount 14y agoNo. 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.
- nknight 14y agoThat'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_on 14y 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.
- asmithmd1 14y agoYou absolutely owe the tax on the income - I personally know people who got bit by this. It was your choice to let your bet ride by keeping it in the stock. You can use the capital loss to off-set capital gains but you owe income tax on money you make when cashing out options.
- ck2 14y agoEvery three cents more per share would have been another million dollars.
- knodi 14y agoI thought employees of facebook can't sell for 6months after the IPO. Is this not true?
- ceejayoz 14y agoKey word: employees.
- knodi 14y agoIsn't CEO technically still a employee of the company.
- ceejayoz 14y agoTechnically? Yes. Realistically? He has the power to do a lot of things regular employees can't.
- bcherry 14y agoThose restrictions are usually not defined in blankets based on role, rather they're written into the stock option agreements at time of grant. Presumably, Zuck and others don't have that clause, at least not on all of their shares.
- heelhook 14y agoNope, 90 days. And Mark, and a bunch of early players, like Eduardo Saverin, GS and others sold during the IPO.
- blahedo 14y agoI figured that's why he held on to >50.1%, so he could sell some and still maintain control.
- kristianc 14y agoHis Class B shares should take care of maintaining control.
- tosseraccount 14y agoThe 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.
- kristianc 14y agoAfaik Zuck's shares have 10x the voting power of regular shares.
- nknight 14y agoThey're diluted, or his are inflated, however you want to look at it. Yes, it's similar to the Google structure, but Google isn't the prototype. Lots of companies over the years have had special shares with extra voting power, families often retain voting control of a company long after they've sold off most of the equity. I'm always divided on this as a shareholder, but more often than not I do trust the founders more than the open market, yes. They have an emotional stake in the company that goes beyond short-term economic interests, and I've seen enough companies flounder after the market jettisons the people who built it, and enough recoveries when the founders return, to question the wisdom of shareholder power.
- tosseraccount 14y agoPower to the democratic shareholder masses! Down with monarchism in the board room! Seriously. If the founders don't want shareholders mucking with their property, then don't go public. Stay private.
- tferris 14y agoThis 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.
- squarecat 14y agoFor better or worse, the man has never exercised traditional business practices.
- lwhi 14y agoFor better or worse, the man has never exercised ethical business practices. (there you go, fixed it for you... )
- squarecat 14y agoAnd 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...
- tedunangst 14y agoWell, for one thing, a move like this is traditional. You were just piling more wrong on top of wrong.
- squarecat 14y agoPoint taken, though I don't think it's unreasonable to say that the headline misrepresented the true nature of the transaction, as a layperson unfamiliar with such fiduciary transactions (notably myself) would understand it. While lwhi's "correction" better reflected my (admittedly ill-communicated) sentiment, it still feels as though there's a Digg-like oligarchical groupthink seeping into Hacker News as of late, which is no more preferable to the Wild West antics of r/programming... =\
- astrodust 14y ago
- rdl 14y agoI 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 14y agoIs he still the majority shareholder? Does this make him accountable to the board, now? Maybe he did it both for the $, and as a show of goodwill toward the board, after that whole "Kiss my butt, we're buying Instagram" thing.
- JustNick 14y agoRight decision, FB shares low for today was 31$ 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 14y agoHe didn't buy at $31. He sold 30.2M shares.
- sirclueless 14y agoI 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.
- JustNick 14y agoThanks for understanding :)
- JustNick 14y agoYes, 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 14y agoUmmm 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 14y 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 14y agoYes 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 14y agoJobs 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.
- deleted 14y ago[deleted]
- matt312 14y ago>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. You contradicted yourself there...Woz was the competent EE, not Jobs.
- flexterra 14y agoI think pretty soon the "Steve Jobs shaped hole" will be filled by Jack Dorsey
- alvarosm 14y agoI'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.
- johnconroy 14y agoEven if he wanted to he couldn't. It'd start a stampede.
- foxhop 14y ago30200000 * 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?
- dsl 14y agoMark Zuckerberg didn't buy Instagram. Facebook did. They are not the same.
- foxhop 14y agoIt was Facebook's money, sure, but Mark bought instagram. Do you have insight on my questions?
- hluska 14y agoBefore I begin, I'm not trying to troll you and am certainly not trying to be disrespectful. However, cashing out $1B of stock and buying a company (which could turn into a serious competitor) for $1B have absolutely nothing to do with each other. The sale of stock was about liquidity, diversity and paying off taxes. It was the right financial decision (that any advisor worth his/her fees would recommend). Finally, Mark Zuckerberg did not buy Instagram. He negotiated the sale on behalf of a company which he happens to own a controlling interest in. Legally, Facebook and Mark Zuckerberg are different entities.
- ahalan 14y agowhat's his email? I have a great idea for a new startup
- huslage 14y agoSo what.
- rafkin98 14y agohttp://www.cnbc.com/id/47537683 http://www.cnbc.com/id/47537683
- cjdentra 14y agoLet's hope that Mr. Zuckerberg does something for the greater good. Opportunities are limitless.
- mladenkovacevic 14y agoGood 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?
- a3d6g2f7 14y agoSelling 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 14y agoDividing the FB valuation by the number of its active users tells us that he has made approximately $170 out of each user.
- mck- 14y agoOn 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 14y agoya 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 14y agoNearly anything you want
- rwebb 14y agoWTF is a COB?
- sirteno 14y agoIn 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 14y agoNot news.