) is making its first stock offering since its IPO in May
2012.The company has decided to sell 70 million shares amounting
to a total value of $3.85 billion.
As per Facebook's recent announcement, out of the 70 million
shares, 27 million will be offered by the company
itself, while 41.35 million will be offered by Mark
Zuckerberg, the chief executive officer of the company.
Moreover, another board member Marc Andreessen will offer 1.65
million shares. The proceeds from the stock offering will be
utilized for paying taxes incurred from exercising options.
The stock offering corresponds to the company's inclusion in
the Standard & Poor's 500 Index, which is expected to create
demand from index funds and other financial institutions planning
. We believe this is a good move by the company, as the share
price continues to move upward.
The secondary offering reflects the growing popularity of
consumer focused social-media providers in the U.S. The company
is making every possible move to raise more funds, for business
expansion. The company is taking up new projects and has
ambitious expansion plans to move ahead in future, one of them
being the company's recent association with,
and other technology companies, if successful, will aid the
It is aimed to connect nearly 5 billion people who do not have
access to Internet. This combined with its massive user base and
its ability to track personal details over time, make it a
formidable force in the online ad market. So, we believe the
funds raised will be used prudently.
Although Facebook is favorably placed, issues like other modes
of advertisement and communication and increasing competition
have affected other social media stocks like
Facebook, currently, has a Zacks Rank #2 (Buy).
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