California May Reap Windfall From Facebook IPO
SAN FRANCISCO (KCBS)— The State of California will reap a windfall from Mark Zuckerberg following the Facebook IPO according to calculations from PrivCo.
The company researches privately held companies and is saying not only the state, but also the IRS, will be getting a piece of the social network behemoth’s pie.
Zuckerberg, the company’s founder and chief executive, will come into some big money as the company goes public and PrivCo’s founder and CEO, Sam Hamadeh, said he should expect to pay millions in taxes.
“Well just the one man will be personally writing a check in the next few weeks to the state of California for $189 million,” Hamadeh said about Zuckerberg.
He estimates about $714 million will go to the IRS.
“We’re basing it on 30.2 million shares of Facebook stock at $35 a share,” Hamadeh said, explaining the latest IPO filing that indicates Zuckerberg is selling.
Hamadeh also explained the tax liability will be triggered as Zuckerberg exercises his stock options.
“He’s basically using these stock options that he got many years ago at six cents a share— you can do the math. Effectively he’s now exercising these options to get Facebook stock that’s now worth $35 a share,” he said.
With about six percent of his stock compared to a lot of recent public offerings, Hamadeh said it’s actually a fairly small amount.
After the 900 plus million-dollar tax bill, when it’s all said and done, Zuckergerg should expect to pocket an estimated $142 million.
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