Zucker­berg to Split Stock for More Con­trol

The Economic Times - - Around The World -

nearly tripled, and the com­pany was the fastest in US his­tory to get to $250 bil­lion in mar­ket value. Its cap­i­tal­iza­tion to­day is $309 bil­lion, big­ger than 27 of the 30 Dow Jones In­dus­trial Av­er­age mem­bers.

Like Google, Face­book be­gan its stock mar­ket life with two sets of stock: Class A s hares, which is what the av­er­age in­vestor owns, and Class B stock that con­fers 10 vot­ing rights and is mainly held by com­pany in­sid­ers. Face­book has about 2.29 bil­lion Class A shares out­stand­ing and 551 mil­lion of Class B.

If you’re a Face­book share­holder, the net ef­fect of the plan will be to have three shares of stock where you once had one, with the price fall­ing by two-thirds when the new shares hit the mar­ket. While the new shares will carry no vot­ing rights, your pro­por­tion­ate in­flu­ence on things like proxy pro­pos­als will stay the same.

The cre­ation of the new class re­quires share­holder ap­proval, af­ter which Face­book in­tends to im­ple­ment­the pro­pos­al­im­me­di­ately.The date for a vote hasn’t been set.

The mea­sure is “to en­sure that the com­pany main­tains its longterm fo­cus,” David Wehner, the chief fi­nan­cial of­fi­cer, said in a tele­phone in­ter­view. “A large part of Face­book’s suc­cess is due to Mark’s lead­er­ship and this pro­posal will al­low us to main­tain that founder-led ap­proach that has served our share­hold­ers well.”

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