May 17, 2012
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Facebooks Elite Cash In But Other Insiders Must Wait
5/17/2012 @ 9:45AM |10,899 views
Facebooks Elite Cash In But Other Insiders Must Wait
Facebook CEo Mark Zuckerberg
Mark Zuckerberg and other elite Facebook insiders are cashing in on their shares while demand for the social network is at a frenzy. This week we discovered that bankers will unleash Facebook shares at a higher price ($34 to $38 a share) than previously planned and that smart money insiders intend to sell more shares.
Yesterday Facebook announced in a S-1 that it had upped the amount of equity it could sell on its Friday IPO to a possible total of 484,418,657 shares. Executive officers and directors (which includes Zuckerberg, Sheryl Sandberg, Marc Andreessen, Jim Breyer,Peter Thiel and others ) could sell a total of 189,369,144 (or $7.2 billion if it goes off at the top of the price range).
Who’s taking more chips off the table? My colleague Eric Savitz broke it downfor us:
- Tiger Global upped the number of shares it will sell to 23.4 million, from 3.4 million.
- Mail.ru upped its planned sale to 19.6 million from 11.3 million.
- Accel Partners now plans to sell 49 million shares, up from 38.2 million.
- DST Group will sell 45.7 million shares, up from 26.3 million.
- Goldman Sachs will sell 28.7 million shares, up from 13.2 million.
- Greylock will sell 7.6 million shares, up from 7 million.
- Peter Thiel will sell 16.8 million shares, up from 7.7 million.
These investors can turn their paper gains into hard cash. But insiders who don’t sell on Friday–and rich investors who bought shares of Facebook on secondary markets (like SecondMarket and SharesPost) have to wait a lot longer to cash out.
As I wrote on March 29th, current stock holders who aren’t selling this Friday will be locked in for an additional 180 days before they can unload shares.
An insider pointed out that if you buy Facebook shares on the private market, you’ll have to hold them for 180 days after the IPO date–that’s everyone, not just employees. It says so here on page 145 of the March 27, 2012 S-1. It’s a mess of legalese (I included it at the bottom of the post*) but a source tells me it basically means no selling allowed until six months after the IPO.
It could be along wait. The hype is hot and the bar is high. Current Facebook shareholders will have to endure at least one quarterly report before they get liquid. If Facebook disappoints many paper gains (especially for accredited investors who bought shares on private markets for about $40 a pop) could turn into real losses.
(Follow me on Twitter at @StevenBertoni)
*Lock-Up Agreements and Market Standoff Provisions
Our officers, directors, employees, and substantially all of our stockholders have agreed with the underwriters or us, not to dispose of any of our common stock or securities convertible into or exchangeable for shares of our common stock for specified periods of time after the date of this prospectus, except with the prior written consent of Morgan Stanley & Co. LLC or us, as applicable. Under the terms of their lock-up agreements with the underwriters, the selling stockholders, other than Mr. Zuckerberg, are eligible to sell up to shares of our common stock in the aggregate on the date that is 91 days after the date of this prospectus, up to shares of our common stock in the aggregate on the date that is 181 days after the date of this prospectus, and the remaining shares of our common stock held by them 211 days after the date of this prospectus. Under the terms of their lock-up agreement with the underwriters, our directors, our executive officers, and certain stockholders not selling shares in this offering are eligible to sell shares of our common stock 181 days after the date of this prospectus. All other holders of our common stock, RSUs and options have previously entered into market standoff agreements with us not to sell or otherwise transfer any of their common stock or securities convertible into or exchangeable for shares of common stock for a period that extends through 180 days after the date of this prospectus. In addition, Mail.ru Group Limited and DST Global Limited and their respective affiliates have entered into an agreement with us to not sell their shares for certain periods of time ranging from six to 18 months following the date of this prospectus. See “Related Party Transactions—Conversion Agreement” for additional information about this agreement.
Randall Lane
Daniel Fisher
Tomio Geron
Comments (1)
Hello Facebook Moguls;
Have I ever got a house for you guys in San Francisco! I hate it with a passion; the view is about as good as it gets, plus you are in bedrock baby, and now that you are billionaires; Do you care if it needs fixed up from one end to the other to bring it in to the 21st Century?? You can even chat with the people at the Google Stop. Of course my husband says it will be the end of the family in San Francisco, and I am an obedient wife to my husband and children; Never you mind that I cannot drive out there; we are at the Apex of three 90 degree hills, and I have such degenerative arthritis that I feel like I am not certain life is worth it some days. Thank you God for my Drs. in California who care!// Billionaires; there used to be so few, because one had to have such a tangible product to become a billionaire, and that is what worries me about you kids, that I wonder if this will be the next, “My Space.”
I admit it, that I am stunned that on line conversation is a product, and that is why I spend most of my time in our barny old house in San Francisco which so many people envy, and my husband had all his growing up years there, then my mother in law kept it, I think mainly as an investment, but then our children fell in love with the San Francisco mold scent so common to all the aging houses there. I almost die laughing when they have the architecture displays and all the credits in the Bay Area, for pickings are slim in earthquake country, and we who grew up back east got used to houses that were more like a small castle in comparison, not to mention yards where children could play, gardens, beautiful murals and stained glass to look at on house tours, turrets, Queen Ann’s, Victorians, and all the real masters from the schools of architecture. If you really want to know Frank Loyd Wright; Even for him, Arizonia; His best work was back all around the East, bur how I ramble, for this all begins with social networking and what the product is,
and I appreciate that young people have built something this valuable on a network which allows all of our free speech and social mingling. Seriously though, a business sold today which is dependent on communication in mid air and fun with your friends and family, which we used to call a party line. Alexander Graham Bell just turned over in is grave folks, for never in the history of man kind has chatting through the magic of microchips manifested such miracles as this. I think Mark Zuckerberg worked on, and by the courts of this land became proprietor of the worlds largest amount of gossip and conversation, so I am astounded by this day.
I need something though out of it. I need a, “Facebook,” just some little dumb thing I can carry around, show off, and whisper; “You, my friend,are going to be somebody when you get one of these, for it cost me a pretty penny! Now I need some of you Bay Area billionaires to convince my husband that we can have a view, all of those things he loves, lots of money to the point we will never worry again, and we can still come in to San Francisco, because you are going to help us find the best condo we have ever dreamt of with an even better view; Best of all, you are going to have organizers come and to go through our garage, and I am going to boss them around silly just telling them what of five children’s old homework can be put to rest, not to mention all of my son’s law books.
I have always said that it would be one disappointed damned criminal who would rob our house, for we have it filled with memories, and if you were expecting silver, gold, and jewels, not to mention electronic devices; Go pick on a house that has young people, for much of our stuff just sucks. Do you really want the yellow flowere bed covers which were the rage in the 1980s, you morons — Talking to the thiefs now, not you nice readers, but you need not get yourself in trouble by coming to our house. Our renter is just like us, and friends — we keep stuff, so your life is not worth it. Now when I get my Facebook in the mail; That is going to be a product.
Heck, yes now the FBs are coming to join the Googlers in my neighborhood, but if any of you know anything about Prop 13; You have another 20 years to put up with us, so to hell and back with the fact the state is broke. Jerry Brown can squeeze blood out of a turnip, and he is going to set us right, and we old geezers are going to squat in our barns. How can we sell a house that has my mother in law in every room still? Besides that, my husband plays train at Christmas just like he did back in 1956. We go to church at the Mission, walk down to 24th street for or Castro for any food we want in the world, so you could not convince my family in a million years that it is time to check our life style. Mom can get new knees and shut the hell up about a more handicap friendly place in San Francisco, and even I know the folks in Pacifica and out in the Avenues had better be praying for the biggie earthquaked to shake them to pieces ever since I leaned about, “The Liquification Factor.” Guess what neighborhood actually survived most of 1906, and they even made a city of shacks in our park which have been turned in to esteemed homes around us.
So new billionaires, I am ready to sell, but I do not think that I can break my husband’s heart. When it comes down to it, I know that of all of the things he loves it is the place in San Francisco, and he will not even get the mold killers in for loosing something of yesterday. God Bless You Billionaires, and would all of you; Please, buy my book, “Pinkhoneysuckle,” by Barbara Everett Heintz, on Amazon/Kindle Ready, and some other. I just placed in the San Francisco Book Fair, and I am going on to other categories in Hollywood, so buy my cheap little book, make me a happy woman, because I am stuck in a barn, and if you want to do some giving, some building, and some putting your heart in the right place; Just let me take you back to my digs in Jackson County, Alabama and Franklin Country, Tennesssee, for your money can go a long way with a bunch of WW II widows who might be just like my Aunt MIldred. Her husband was wounded on a bridge going in to France and did not feel like he deserved his pension, so he did not ask for it, so my Aunt is just one of many growing older who needs help. Give something back to this America that made you a billionaire today, and I mean it; Buy my book, and I have some good works in mind, for it is damned certain that my husband is not apt to go anywhere!!!