When it comes to Facebook, one name that undeniably stands out is Mark Zuckerberg. Naturally, one of the most frequently asked questions is: How many shares of Facebook does Mark Zuckerberg own?
Before delving deeper into this matter, it is important to have an understanding of the financial state of Facebook. As of January 2021, Facebook is valued at $828.2 billion. Shares of the company are valued at $307.13 per share. As of the closing date on January 15, 2021, global traders controlled 2.789 billion shares of Facebook.
In terms of Mark Zuckerberg’s personal monetary stake, he owns over 12% of the platform. This doesn’t mean that he is the individual shareholder with the highest percentage of the platform. What it does mean is that Mark Zuckerberg has 395.982 million shares, or 13.9% of Facebook.
Over the years, Mark Zuckerberg has been dedicated to consolidating his hold of the company. In October 2018, as part of a stock transfer agreement, Zuckerberg loaned his shares to the Chan-Zuckerberg Initiative (CZI). It allowed him to maintain voting control of the company. This specific action marked an end to the dual-class structure of the company.
To get additional insights, we consulted experts, who gave the following outlook. Paul Bischoff, a privacy advocate, says “Mark Zuckerberg still has control of the company, but he hasn’t been able to do much with it lately. While he has been able to use his shares to buy votes in the past, these days he’s in a much tighter spot. For example, his controversial executive compensation packages were challenged in 2019 and failed. That’s not to say that he doesn’t still have a lot of power, but his power is checked by other shareholders and even the public.”
Our own insights are that Mark Zuckerberg maintains an impressive amount of control over Facebook. Despite criticism from multiple corners, he has kept himself tightly secured. His quasi-loan to the CZI looks set to continue in the long term, meaning that the percentages might remain unchanged – or perhaps even increase – in the future.
Mark Zuckerberg founded and launched Facebook in 2004 as a Harvard student. He started to sell shares in May 2004, and in 2005, he accepted a $12.7 million investment from Accel Partners which allowed Facebook to build out its platform. This resulted in a massive expansion of users and use cases. Despite a valuation of just $530 million and Mark Zuckerberg only owning 28% of the company at the time, Microsoft seized the opportunity to invest and acquired 1.6% equity stake in 2007.
In 2012, Facebook went public with a whopping initial public offering (IPO), valued at over $16 billion. This gave Mark Zuckerberg control of 57% of the stock and voting power of the company. Over the years, the stock has grown, with more and more institutional investors buying in. To this day, there is no greater individual stakeholder than Mark Zuckerberg.
As of the closing date on January 15, 2021, Mark Zuckerberg remains the largest shareholder of Facebook, holding 395.982 million shares at 13.9% of the company. This is down from his peak stake, prior to the IPO, of 28% ownership.
There are a few other key developments to consider. Chief among them is how Mark Zuckerberg has used IC-DISCs (or Interest Charge Domestic International Sales Corporations) to convert his taxable income from Facebook shares into capital gains, which is taxed at a much lower rate.
This is a move that was not uncommon among billionaire founders, including Jeff Bezos and Larry Ellison, who utilized IC-DISCs to provide income security and lower tax liabilities.
Another notable development was the loan of over 375 million Facebook shares to the Chan-Zuckerberg Initiative (CZI) in 2018. This was a way to keep the voting control in the hands of Mark Zuckerberg. It also helped him to maintain control of the company while bypassing the technical complications of owning more than 25% of the company.
how will mark zuckerberg’s ownership be affected by upcoming ipo?
It is predicted that the upcoming crypto-currency IPO for Facebook may result in the decrease of Mark Zuckerberg’s ownership percentage. If a total of 2.5 billion shares are released, Mark Zuckerberg’s stated ownership rate of 13.9% would decrease to 11.6%. This decrease may even be greater if more shares are released during this event.
Further, while Mark Zuckerberg currently owns the majority of voting shares, this might also change with the introduction of 4.5 billion non-voting class B shares to be sold in the IPO. Many investors might opt to buy these class B shares, which would mean that Mark Zuckerberg would no longer be the largest voting shareholder.
Ultimately, the IPO could drastically change the ownership structure of Facebook and Mark Zuckerberg may no longer maintain majority control. Notably, Mark Zuckerberg intends to maintain voting control and has found a way to do this by maintaining an ownership stake of less than 30%.
What other methods does Zuckerberg use to increase or maintain his ownership?
Mark Zuckerberg uses a number of methods to increase and maintain his ownership in Facebook. This includes taking part in various stock compensations and exercising options. For example, in 2017, Zuckerberg sold approximately $500 million worth of stock in order to pay his tax liabilities. Similarly, in 2018, he sold over $2.8 billion in stock.
Mark Zuckerberg is also likely to continue taking advantage of various stock compensation options, such as the Restricted-Stock Unit (RSU) plan. This allows Zuckerberg to defer paying taxes on the stock until it’s vested, resulting in lower taxes. Zuckerberg has reportedly vested over 8 million RSUs since 2015.
Additionally, Zuckerberg is experimenting with even more sophisticated methods, such as Blockchain and cryptocurrency. In 2019, Zuckerberg unveiled his plans to launch a cryptocurrency called “Libra”, in order to provide a secure way for people all over the world to send and receive money.
Overall, Mark Zuckerberg has multiple methods for increasing and maintaining his ownership in Facebook. While the upcoming IPO is likely to reduce his overall ownership percentage, Zuckerberg’s strategies to offset and even avoid taxes mean that he will still retain a large portion of the company’s ownership.
What other investments and opportunities have Zuckerberg pursued?
Outside of maintaining control and stock ownership of Facebook, Mark Zuckerberg has pursued other financial opportunities as well. In December 2020, he acquired a 10% stake in the exclusive real estate development firm Cadre, which is valued at more than $2 billion. This purchase is notable, as it gives Zuckerberg more control over real estate and is part of a longer term strategy to expand investment opportunities in the real estate industry.
Additionally, Zuckerberg followed through with his plans to launch a cryptocurrency. After the announcement of Libra in 2019, Zuckerberg created the nonprofit Libra Association with the support of 28 founding members from across business, finance, internet, and other industries. The Libra Association is responsible for launching, managing, and governing the Libra network, which is set to go live later this year.
The Libra project has been met with considerable criticism and regulatory pressure, but Zuckerberg is undeterred. He is making considerable investments into the project and has continued to move forward with the launch. Despite significant pushback from the U.S. and other governments, Zuckerberg remains confident in the success of Libra.
Finally, Zuckerberg’s charitable efforts cannot be forgotten. His organization, the Chan-Zuckerberg Initiative (CZI), focuses on projects and initiatives aimed at social and scientific change. Zuckerberg has funded various health, research, and education projects, including the Human Cell Atlas, a project aimed at mapping every type of cell in the human body.
