Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Search for Jobs

Index Last Change % Change
Dow 18,199.33 30.06 0.17%
Nasdaq 5,250.27 -33.13 -0.63%
S&P 500 2,139.43 -3.73 -0.17%
Treasuries 1.79 0.00 0.00%
Data as of 11:54pm ET
Company Price Change % Change
Chesapeake Energy Co... 6.00 -0.11 -1.80%
Apple Inc 115.59 -2.66 -2.25%
Bank of America Corp... 16.87 0.15 0.90%
Southwest Airlines C... 38.40 -3.55 -8.46%
Ford Motor Co 11.88 0.03 0.25%
Data as of 4:15pm ET


Some analysts think Netflix makes sense as a takeover target now that AT&T and Time Warner may be kicking off a new round of mergers in the worlds of media and tech. More

Comparing the rise of Donald Trump with the shocking Brexit vote in the U.K. is misguided, according to a pair of new reports released on Wednesday. More