Zuckerberg, who held a total of 533.8 million shares, may garner over $1 billion in cash and stocks worth $17.6 billion, post the Facebook IPO
New York: Facebook Inc's initial public offering (IPO) will vastly increase the wealth of its 27-year-old co-founder Mark Zuckerberg, leaving him with over $1 billion in cash and stocks worth $17.6 billion, reports PTI.
In a filing to the US Securities and Exchange Commission, Facebook said it will sell 337.41 million shares and the IPO price will be between $28 and $35 per share. At this range, the company will be valued at between $77 billion and $96 billion.
Mr Zuckerberg, who held a total of 533.8 million shares, would sell 30.2 million shares garnering over $1 billion in cash at the high end of the range. His remaining 504 million shares will make him worth $17.6 billion if Facebook hits the top of its IPO range.
The pricing indicates Mr Zuckerberg's total holding is worth about $18.7 billion making him richer than Microsoft Corp's Steve Ballmer and Wipro's Azim Premji.
The IPO would further enhance Mr Zuckerberg's financial position. According to Forbes 2012 list, Facebook's co-founder scored 35th rank with a wealth of $17.5 billion.
Mr Ballmer had net worth of $15.7 billion, while Mr Premji's was $15.9 billion, as per Forbes.
Mr Zuckerberg, who started Facebook from Harvard dorm room in 2004, would retain voting control of 58.8% of the company after the IPO and plans to use the proceeds to cover taxes.
In 2011, Mr Zuckerberg took home $1.49 million. He had a base salary of $483,333 in 2011, but it would decline to just $1 next year, on his request.
Besides, the social network's early investors James Breyer of the venture capital firm Accel Partners is also offering 38.2 million shares. Other stockholders who would be offering shares would pocket $1.33 billion.
In addition, Goldman Sachs is unloading 20% of its stake, or 13.2 million shares to take home $462 million.
Facebook, which is expected to go public on 18th May is likely to raise about $11 billion through the IPO at the upper end of the price band. The stock would be listed on Nasdaq under the symbol 'FB'. With 901 million users as of 31 March 2012, Facebook is the most popular social networking site in the world and a magnet for advertisers.
"With Facebook's user base approaching 1 billion it is safe to say the consumer base of the social networking site is close to 1/6th of the global population. This being said, interest levels and demand will drive the price of the stock are very high and with limited supply one can make the assumption that those who are allocated shares of Facebook at the Initial Public Offering price will stand to benefit. Those who are not allocated shares of Facebook should proceed with caution for their investment decisions. On the first day of trading anything can happen, " said Neel Pujara, co-founder and chief executive of DuniyaTrade.com. DuniyaTrade, a US-based brokerage is offering Indian investors to invest in the Facebook IPO.
"Drastic price movements in the stock could cause a market order to execute at a price significantly different from the time an investor enters an buy or sell order. A limit order allows one to set a price at which they wish to purchase or sell a predetermined lot of shares. A market order will execute at the price at which the stock trades the moment the market receives the order," he added.
It's much anticipated IPO is expected to shadow that of other tech giants like Google which had raised $1.9 billion and valued the company at about $23 billion when it went public in 2004. As of 4th May, Google has a market cap of $194.6 billion, while Apple's market cap is $528.5 billion.
"India has a long way to go in terms of meeting its infrastructure requirements. The 12th Five Year Plan (2012-17) envisages $1 trillion investment in the sector" Pradeep Singh, IDFC Projects managing director said
Manila: India needs to raise infrastructure spending to 10% of GDP (gross domestic product) to achieve and sustain economic growth target of 9% in the coming years.
"In order to sustain growth targets, this (investment in infrastructure) would need to increase further to over 10% of GDP by 2017," IDFC Projects managing director Pradeep Singh said in a presentation at the annual meeting of Asian Development Bank.
India's infrastructure spending is 8% of the GDP, as against China's 9%, he said. The country's GDP was $1.4 trillion at the end of March 2011.
Acknowledging that India has a long way to go in terms of meeting its infrastructure requirements, Mr Singh said the 12th Five Year Plan (2012-17) envisages $1 trillion investment in the sector.
Of the total targeted investment, the private sector is expected to invest $500 billion, with around $350 billion through debt and $150 billion of equity over next five years.
Domestic funding sources, Mr Singh said, will not be sufficient to meet these needs.
However, during the 11th Plan period ended in March, investment in infrastructure sector fell short of its target of $500 billion.
Total investments during the past five years were about $425 billion, Mr Singh said.
Despite the aggressive growth in last five years, India's basic infrastructure ranked 86th in Global Competitive Report 2010 by World Economic Forum, he pointed.
Projecting India as the investment destination, State Bank of India chairman Pratip Chaudhuri said, in a separate presentation, that Qualified Foreign Investors were allowed to directly invest in Indian equity market in January.
Besides, he said, the overall FII investment limit in government securities and corporate bonds has been enhanced to $60 billion.
Mr Chaudhuri also said India has a well regulated banking system, with 98% of the banks fully computerised.
The government has taken major initiatives like the new investor-friendly manufacturing policy, liberalisation of inflows in the capital market and easing of the rules for the companies to raise funds overseas, Mr Mukherjee said
Manila: Sharing concern over slow pace of key reforms in India, finance minister Pranab Mukherjee said that delays are inevitable in a coalition-run government as it has to take on board views of different ruling partners and the process is time-consuming, reports PTI.
However, to boost business sentiment, the government has taken major initiatives like the new investor-friendly manufacturing policy, liberalisation of inflows in the capital market and easing of the rules for the companies to raise funds overseas, he said.
Significantly, Mr Mukherjee said, "Discussions are also underway about decontrolling some of the administered fuel prices."
Addressing a press conference after taking over as chairman of the Board of Governors of the Asian Development Bank (ADB), he shared concerns among a section of the industry and investors over delays in decision-making.
Several key reforms like liberalisation of the voting rights in banks, hiking foreign direct investment (FDI) in insurance and allowing it in the multi-brand retail have been pending for long.
Some of the allies of the ruling UPA coalition have been opposing FDI in retail and other reforms.
"Yes, there has been some delay in some of the crucial legislations, but when you run a multi-party coalition government and when the electorate gives a fractured mandate which limits the powers of the executive... with the mandate that you have to carry others with you... your own views or your own ideas are not adequate unless you carry others with you," Mr Mukherjee said.
Although it is time-consuming and at times to "the point of almost frustration", it is lasting, Mr Mukherjee said, adding that since the economic reforms began in 1991, there is a commitment among the political parties on liberalisation.
Asked about the perception among some of the global rating agencies on India, Mr Mukherjee said they would have captured the mood and other parameters at a particular point of time, but the economic situations keep changing, like it improved in the US.
Last month, Standard and Poor's had lowered the country's sovereign rating outlook on account of fiscal situation.
Mr Mukherjee said the government is committed to addressing important issues like increase in fiscal deficit. "On the fiscal front, we are committed to bring down the subsidy bill below 2% of the GDP in 2012-13. Discussions are also underway about decontrolling some of the administered fuel prices," he said.
Citing strong fundamentals and hopes of revival in business confidence, Mr Mukherjee said the Indian economy would return to the pre-global crisis growth path in the coming years.
"...strong fundamentals of our economy will help us return to a sustained growth path of pre-2008 crisis level in the coming years," he said.
India was growing at over 9% before the global financial crisis of 2008 pulled down the growth rate to 6.7% in 2008-09. India has projected a growth rate of 7.6% in 2012-13, up from 6.9% recorded in the previous fiscal.
Mr Mukherjee said that despite the impact of Eurozone debt crisis on the economy, "India has continued to be a front-runner in terms of economic growth in the region, which underlines the resilience of the Indian economy. The Indian economy is more resilient than many other nations to withstand this fresh round of global economic turmoil, as the bulk of India's GDP is domestic demand driven," he added.