Tomahawk, WI 12/23/2013 (BasicsMedia) – Facebook Inc (NASDAQ:FB) is making secondary stock offering of 70 million shares. This will be the first share dilution that the company is making since its debut in May 2012. Out of the total secondary offering, about 27 million will be fresh offering will the rest will come from the holding of existing shareholders, including the company’s CEO Mark Zuckerberg.

Mr. Zuckerberg if offering about $41.35 million of his stock for sale and this is expected to fetch him $2.3 billion. Once this transaction is concluded, the CEO voting control is expected to drop to around 62.8 percent, down from 65.7 percent. However, the CEO is also expected to purchase more of the company’s series B share. This series of shares carry higher voting power per stock.

Facebook Inc (NASDAQ:FB) believes that given the time of this dilution with regard the upcoming Q4 result, it will have minimal impact on its stock. And this is a view that is also shared by most analysts following the stock.


The net proceed from the shares offering is expected to be used in such corporate purposes as acquisitions and investment activities like its ongoing Internet network project. Facebook Inc (NASDAQ:FB) is investing heavily in Internet cables which span continents an even underwater. It is among the leading Internet tech giants that are taking matter into their own hands by seeking to control their bandwidth quality and cost. The other companies are Google Inc (NASDAQ:GOOG) and Microsoft Corp (NASDAQ:MSFT).

As for acquisition, Facebook Inc (NASDAQ:FB) is expected to boost its takeover of startups to improve its platform. It is closing 2013 with several startup acquisitions and it is also looking to take more companies in 2014.

The future

The company is flexing its financial muscles in order to remain ahead of competition. It has increasingly come under pressure since rival Twitter Inc (NYSE:TWTR) listed last month.

The most notable growth in Facebook Inc (NASDAQ:FB) has happened in the second half of this year. The stock has more than doubled so far in the year, managing to rise from the historic trough of $17.78 per share following its botched listing on NASDAQ.

Owing to the impressive gains that Facebook Inc (NASDAQ:FB) has made so far in the year, it is now joining S&P 500 Index. This move has excited traders and the stock has been climbing in ways never seen before. This good news will be sealed if the company manages to maintain revenue and profit growth in Q4, just as it has done in the past four consecutive quarters.

Ad revenue

Facebook Inc (NASDAQ:FB) is leaving no stone unturned in its efforts to get the most of ad dollar. The company last week started selling video ads which are expected to generate more revenue than text and images that have been in long use. The company is also rolling out more tweaks its platform in order to attract more users and also make users spend more time on the platform.

The newly launched video ad is expected to play into the hands of brand advertisers who have the financial budget to bid for expensive ads, thus driving up Facebook Inc (NASDAQ:FB)’s revenue and bottom line.

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