Facebook does 5-for-1 stock split

By Stacy Cowley, tech editor


NEW YORK (CNNMoney.com) -- Those lucky few with Facebook stock shares now own a whole bunch more.

Facebook said Friday that it is doing a 5-for-1 stock split, marking the third split in the company's history. The privately held social networking company, founded in 2004, previously executed 4-for-1 stock splits in 2006 and 2007.

Facebook's shares won't have a clear market value until the company goes public -- a move that's not imminent. Prominent Silicon Valley investor Peter Thiel, an early Facebook backer, said at a tech conference last week that he doesn't expect the company to IPO until 2012 at the earliest.

Facebook currently has 1,700 employees, many of whom have ownership stakes in the company. Facebook founder Mark Zuckerberg, whose net worth Forbes magazine estimates at $6.9 billion -- most of it not yet liquid -- recently made headlines with his first major philanthropic donation: $100 million for public schools in Newark, N.J.

Until Facebook goes public, the primary outlet for those who wish to sell shares is SecondMarket, an exchange that enables accredited investors to buy shares of privately held ventures. Recent trades there put Facebook's current valuation at around $30 billion. Since SecondMarket launched in April 2009, the company has processed more than $150 million in Facebook stock sales, according to a SecondMarket spokeswoman.

Pre-IPO stock splits are a common move for fast-growing private firms. Google (GOOG, Fortune 500) split its stock several times before going public in 2004 for $85 per share.

Stock splits don't increase a shareholder's equity in a company: A 5-for-1 split replaces one share worth $50 with five shares worth $10. But by increasing the number of shares outstanding and reducing the cost of each, the splits can increase liquidity and make a company's shares easier and cheaper to trade.  To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 24,700.21 -287.26 -1.15%
Nasdaq 7,725.58 -21.44 -0.28%
S&P 500 2,762.59 -11.16 -0.40%
Treasuries 2.89 0.00 0.00%
Data as of 1:23am ET
Company Price Change % Change
Advanced Micro Devic... 16.69 -0.42 -2.45%
AT&T Inc 32.39 0.20 0.62%
General Electric Co 12.95 -0.25 -1.89%
Bank of America Corp... 29.26 -0.14 -0.48%
Micron Technology In... 59.25 0.80 1.37%
Data as of Jun 19
Sponsors

Sections

Wells Fargo's quest to clean up its act requires workers to shine a light on shady activity when they see it. More

While patents are intended to protect intellectual property, they're also seen in the tech industry as a way to boost the brands of companies and their employees. More

The state's booming industries will be looking for skilled workers and this online community college intends to retrain them. More