Zuckerberg Stake Worth Up to $28.4B in IPO

By Ari Levy - Feb 2, 2012 7:38 AM GMT+0700
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Mark Zuckerberg, chief executive officer of Facebook Inc. Photographer: David Paul Morris/Bloomberg

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Feb. 2 (Bloomberg) -- Gary Rieschel, founder and managing director of Shanghai-based Qiming Venture Partners, talks about Facebook Inc.'s planned initial public offering and the social-networking website's business prospects for the China market. Facebook filed to raise $5 billion in what would be the largest Internet IPO on record. Rieschel speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Facebook Inc. (FB)’s initial public offering may value Mark Zuckerberg's stake at $28.4 billion, making him wealthier than Google Inc. (GOOG)’s co-founders and almost on par with Larry Ellison, who started Oracle Corp. (ORCL) 35 years ago.

The 27-year-old founder and chief executive officer of Facebook is the company’s top stakeholder as it prepares to go public, with 533.8 million shares, or 28.4 percent, according to a regulatory filing today. Investment firms Accel Partners and Digital Sky Technologies own a combined 16.8 percent.

Facebook said in its prospectus that it plans to raise as much as $5 billion in an initial public offering. The Menlo Park, California-based company is discussing a valuation of $75 billion to $100 billion, two people familiar with the matter said last week. At the top end of that range, Zuckerberg will own stock worth $28.4 billion. His command of the company goes beyond stock -- he controls 56.9 percent of the voting power.

“It looks from this as if Zuckerberg is maintaining a lot of control,” said Rebecca Lieb, an analyst at Altimeter Group in New York. “He’s shown a great deal of wisdom and maturity in bringing the company to this level of stability and profitability before going public.”

By comparison, Google’s Sergey Brin and Larry Page are each worth more than $15 billion based on their ownership of that company’s shares. Ellison, 67, owns stock worth about $31 billion in Oracle, the software company he founded in 1977.

Lockup Period

While Facebook shareholders are poised for riches, they won’t be able to start selling until the expiration of the so- called lockup period, in some cases six months after the shares begin trading. Zuckerberg may sell shares as part of the IPO, the company said in the filing.

Excluding Zuckerberg’s ownership, the combined value of Facebook stock held by everyone else is $71.6 billion, based on a $100 billion valuation.

Facebook co-founder Dustin Moskovitz, whose work on the company was depicted in the 2010 film “The Social Network,” owns 133.8 million shares, or 7.6 percent. Moskovitz was Zuckerberg’s roommate at Harvard University.

Eduardo Saverin, another co-founder and Harvard classmate who sued Zuckerberg over ownership of the company, isn’t mentioned in today’s filing. Neither are Tyler and Cameron Winklevoss, the brothers whose legal battles with Zuckerberg over Facebook also were dramatized in the Oscar-winning film.

Facebook Executives

Facebook Chief Operating Officer Sheryl Sandberg owns 1.9 million shares, or 0.1 percent. She also holds 39.3 million restricted stock units of the company’s total of about 380 million units outstanding. The shares underlying the units will be delivered to owners six months after the IPO.

Facebook Chief Financial Officer David Ebersman owns 7.5 million restricted units in addition to 2.2 million shares. Michael Schroepfer, vice president of engineering, owns 2.2 million shares and 6.1 million restricted stock units.

Peter Thiel, who provided a seed investment for Zuckerberg in 2004, owns 44.7 million shares, or 2.5 percent of the company. Marc Andreessen, co-founder of Netscape Communications Corp. and a Facebook board member, owns 3.6 million shares, or 0.2 percent.

Today’s filing only includes the holdings of investors who own at least 5 percent of stock and the stakes owned by board members and officers.

Other firms that own Facebook shares, including Greylock Partners, Elevation Partners and Meritech Capital Partners, aren’t noted in the table of biggest holders.

Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen’s venture capital firm, Andreessen Horowitz.

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net