Zuckerberg to Split Stock for More Control
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.”