Facebook's latest filing: Insiders are cashing in
The company's latest S-1 Registration Statement reveals that the increase in available shares will come from investors and early shareholders, and not Facebook.
Facebook today revealed that it will have. But the social network won't be the one cashing in on it.
Facebook will now offer up to 484.4 million shares of class A common stock, including overallotment, when it goes public on Friday. In a filing yesterday, Facebook revealed that it was only planning to go public with a maximum of 388 million shares. The increase has pushed the maximum amount of cash potentially secured in the offering up $3.66 billion from $14.7 billion to $18.4 billion.
In its filing, however, Facebook revealed that it's offering the same amount of shares -- 180 million, plus another 3 million to cover overallotment -- as it was yesterday. The difference is made up by selling stockholders who have increased the number of shares they're handing over.
So, who is selling the shares? According to the filing, Digital Sky Technologies, a Russian investment firm that played a key role in Facebook's funding over the years, has decided to offer nearly 46 million shares on Friday, up from the 26 million it initially planned to sell. Venture capitalist Peter Thiel is now selling 16.8 million shares, instead of the 7.7 million he had previously planned to offer.
Another major Facebook investor, Accel Partners, will sell 49 million shares, rather than the 38 million it previously agreed to offer.
So, why the sudden change in position? It all comes down to cash. Until yesterday, Facebook said that it planned to price its shares between $28 and $35 when it goes public. However, the company said yesterday that it would. Given that, investors who are offering more shares will be able to make even more in the offering, assuming Facebook prices it towards the top-end of its range.
At this point, it's simple math.