Mark Zuckerberg May Cover Taxes By Selling $1.67 Billion in Facebook Stock


Mark Zuckerberg will face taxes of around $1.67 billion when he inevitably exercises options to buy 120 million shares in Facebook. What’s a mere multi-millionnaire to do?

Well, many pundits expect the 27-year-old CEO to sell back about $1.67 billion of Facebook Inc. stock in the company’s initial public offering to cover his tax liabilities. And even then, such a figure will be a drop in the ocean compared to the value of Zuckerberg’s overall stake in the social network, which could be worth as much as $28.4 billion.

Facebook’s IPO filing, first made on February 1, proposes a valuation of $75 billion to $100 billion, though the company attracted a valuation of at least $94 billion (about $40 a share) when it auctioned its shares on the private market this week.

The IPO filing goes on to address Zuckerberg’s tasty tax bill:

“We expect that substantially all of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur upon his exercise of an outstanding stock option to purchase 120,000,000 shares.”

Incidentally, as tax rates are a hot topic right now, Zuckerberg’s tax rate will be 35 percent, according to Victor Fleischer, associate professor of law at the University of Colorado.

Businessweek got a ‘no comment’ when it approached Larry Yu, a spokesman for Facebook, yesterday.

[Via Businessweek]

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