Facebook is one of the most prolific corporations in the world and its founder, Mark Zuckerberg, is one of the wealthiest individuals in the world. Zuckerberg has gained a great amount of wealth since the launch of Facebook in 2004, but how much of it is actually held in Facebook stock? To answer this question, we must first look at the current ownership of the company.
Facebook is currently 46% owned by Zuckerberg. This amounts to roughly $68.5 billion at the current market value. If we take into account his voting power, this percentage rises to 61%. Zuckerberg also beneficially owns an additional 10% of Class B shares, which have additional voting power equal to 10 votes per each Class B share. He also owns approximately 6 percent of the common stock, amounting to approximately $8.8 billion. Therefore, in total, Mark Zuckerberg owns approximately 66 percent of Facebook, which is valued at about $77.3 billion.
Zuckerberg has been and continues to be highly influential on Facebook’s company decisions. The corporation name was initially listed as “Thefacebook” with the registration as “Thefacebook, LLC”. Zuckerberg wanted to add “LLC” to the end of the name to emphasize the limited liability benefits that the arrangement provided. In his Facebook Shareholder Letter in 2020, Zuckerberg wrote, “As the largest shareholder, I can tell you that my motivation is to build the best, most valuable company possible.” He also wrote, “We’re building technology that we believe will help bring safety and health to our communities.”
The rise of Mark Zuckerberg and Facebook has been nothing short of meteoric. Analysts and financial advisers offer differing views on how much of his wealth should be held in Facebook stock. Many of them point to the large amount of risk that comes with holding so much of the company’s ownership.
Known to have an alternative view of managing money, financial advisor Rich Howard states, “While many people prefer diversification in their portfolio, Zuckerberg may very well be satisfied with the security that comes with being the majority owner of a successful company. For him, it may be more beneficial to concentrate his wealth in one stock that he knows well and can take an active role in governing.”
The financial risk of having such a large stake in one company is significant, as any significant drop in the stock could lead to a massive loss in wealth. However, as long as Zuckerberg remains bullish in the stock, and as long as the company maintains its current levels of success and growth, it is knowledge that he has chosen to put a majority of his wealth in a company he played a major role in launching.
The effect on Zuckerberg’s Wealth Over Time
Over the last fifteen years, Zuckerberg’s wealth has grown exponentially. When he founded the company in 2004, his stake in the company was worth about $85 million. Over the years, he has been able to increase the value of his stake through exercises of stock options and by issuing additional shares that have increased his ownership. This strategy has led to increased value of the company and increased wealth for Zuckerberg. His stake in Facebook has helped contribute to his wealth as of August 2020, estimated at $87.7 billion.
Given the rapid growth of Facebook’s stock, experts have suggested that Zuckerberg should sell more shares to diversify his portfolio and mitigate risks. Jonathan Garber, a financial analyst, believes this could be beneficial, but that “if Zuckerberg chose to sell some of his shares, the company could potentially take a hit.” He believes that since his continued involvement on the company’s board is essential, selling shares could create a sense of uncertainty for shareholders.
Garber also suggested that Zuckerberg could “sell some of his shares but maintain his control over the company” as an alternative strategy. He believes it would be more beneficial than attempting to sell off large chunks of his ownership.
In order to preserve his control over the company, Zuckerberg has taken advantage of the various tools available to him. For instance, when he was converting his Class B shares to Class A shares in 2012, he took advantage of the dual-class structure which enabled him to maintain control of the company. Doing so meant that he would own less of the company overall but that he would still maintain the same voting power.
Furthermore, Zuckerberg successfully convinced investors to buy into the idea that future profitability would come from long-term user engagement and data-driven advertising. This enabled him to sell shares on the public market with minimal dilution of his voting power. This method of shareholder dilution has allowed Zuckerberg to maintain control of the company while still generating billions of dollars in liquidity.
Zuckergberg’s Future Plans For Facebook Stock
Despite being the majority shareholder of Facebook, Zuckerberg is adamant that he will not be selling off any of his shares any time soon. In fact, he mentioned during his Q3 2020 earnings call that he had no plans to sell any of his shares “over the foreseeable future.” Furthermore, he stated that he was investing in the company to demonstrate his continued commitment to the platform and its mission.
In addition to the stock sales, Zuckerberg has also committed to donating a portion of his shares to charitable causes over the course of his lifetime. In 2015, he and his wife Priscilla Chan, established the Chan Zuckerberg Initiative, a limited liability company that works for the advancement of education and healthcare. His company has already committed to donating $45 billion to charitable causes, including $18.5 billion worth of Facebook stock.
Zuckerberg’s wealth and ownership in Facebook have far-reaching implications for the future of the company and its shareholders. His stake in the company will continue to grow as the company performs well, and as more shares are issued by the company. If the company continues to perform as expected, Zuckerberg’s wealth will also increase, leading to more resources being devoted to charitable causes, as well as research and development.
From a shareholder perspective, Zuckerberg’s ownership in the company carries a great amount of value. His continued involvement in the company and desire to grow the platform bodes well for the long-term prospects of the company. Moreover, his commitment to charitable causes is likely to help the company remain a positive force in the world.
Review of Zuckerberg’s Wealth Held By Facebook
Overall, it is clear that Zuckerberg has placed a great amount of his wealth and trust in his own company. He has held onto a majority of his ownership in Facebook and continues to be involved on the company’s board. This indicates his commitment to the company and its mission to bring safety and health to people’s lives. Furthermore, his commitment to charitable causes indicates his desire to be a force of good in the world.
The amount of wealth that Mark Zuckerberg holds in Facebook has been estimated at approximately $77.3 billion. This figure is likely to increase as the company performs well and as additional shares are issued. Looking to the future, the potential for Zuckerberg’s wealth to grow is great, and the potential for Facebook to remain a positive force in the world is even greater.
