The prognosticators have been warning that the stock market will become sour quick, if the massive buying of bonds (at a rate of over $80 billion a month) were to taper. That began this week and Facebook, which has already had a volatile relationship with Wall Street, is one of the first torespond.
The announcement below, if it came out on Monday rather than Thursday, would make the people of Facebook appear to be geniuses. Its timing, instead, has some wondering if the massive social media site might change its name to the Titanic. This is what Facebook had to say in astatement:
“Facebook, Inc. today announced that it is commencing an underwritten registered public offering of 70,000,000 shares of its Class A common stock. A total of 27,004,761 shares are being offered by Facebook, and a total of 42,995,239 shares are being offered by certain selling stockholders, including 41,350,000 shares offered by MarkZuckerberg.
“Standard & Poor’s, a division of McGraw-Hill Financial Inc. (S&P), has announced that, effective as of the close of trading onDecember 20, 2013, it plans to include Facebook’s Class A common stock in the S&P 500 Index, which is comprised of 500 common stocks that S&P selects. Shares of Facebook’s Class A common stock will be offered primarily to index funds whose portfolios are primarily based on stocks included in the S&P 500Index.
“Facebook intends to use the net proceeds of the offering for working capital and other general corporate purposes. Facebook will not receive any proceeds from the sale of shares by the selling stockholders. Facebook expects that the majority of the net proceeds Mr. Zuckerberg will receive upon the sale of shares in the offering will be used to satisfy taxes that he will incur in connection with his exercise, in full, of an outstanding stock option to purchase 60,000,000 shares of Class B commonstock.”