The video this transcript is based on appeared on December 19.
NEW YORK ( TheStreet) -- Facebook CEO and founder Mark Zuckerberg is selling 41.4 million shares of Facebook stock that are worth about $2.3 billion to pay a tax bill.
Good morning and welcome to Wall and Broad.
Facebook ( FB) shares were down over 4% in early trading this morning after it was announced that founder and CEO Mark Zuckerberg would sell 41.4 million shares that are worth about $2.3 billion. Those losses have been trimmed and now its only down 2%. The market reaction has been negative because at first look, it is typically negative when a CEO sells stock in his own company. In this case, Mr. Zuckerberg is using the money to pay a tax bill related to his option to buy 60 million Class B shares. As a result, his voting power is reduced from 58.8 % to 56.1%.
It's a busy morning for Facebook as the company also announced a secondary offering of 70 million Class A shares. 27 million plus shares will come from Facebook and the remainder made up with Zuckerberg's chunk and also board member Marc Andreessen who is selling 1.65 billion Class A shares. The shares are going to be offered primarily to index funds now that Facebook will be a part of the S&P 500 as of the close of trading on December 20.
Mr. Zuckerberg is also feeling charitable this month and in the spirit of giving he will gift 18 million shares to the Silicon Valley Community Foundation. That donation works out to be about $1 billion. Shareholders don't have to worry too much, even though the stock is down slightly today, its moved up over 100% for the past year. And that gets a big thumbs up and a like button.
I'm Debra Borchardt for TheStreet. Good luck trading.
Written by Debra Borchardt in New York.