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

Index Last Change % Change
Dow 21,410.28 12.99 0.06%
Nasdaq 6,254.56 17.87 0.29%
S&P 500 2,439.31 4.81 0.20%
Treasuries 2.15 -0.00 -0.09%
Data as of 12:09pm ET
Company Price Change % Change
Advanced Micro Devic... 14.47 0.09 0.63%
Bank of America Corp... 22.85 -0.08 -0.35%
Ford Motor Co 11.02 -0.11 -0.99%
Oracle Corp 51.42 1.12 2.24%
Bed Bath & Beyond In... 29.84 -3.91 -11.57%
Data as of 11:54am ET
Sponsors

Sections

Sears Holdings is closing another 18 stores along with two Kmarts as problems continue to mount for iconic retailer. More

The Senate health care bill would help younger, healthier and wealthier Americans, while raising costs for those who are sicker, older and poorer. More

After serving as nothing but a giant roadblock for months, China's futuristic elevated bus and its tracks are being removed. More

Home prices have reached another record high, and buyers are feeling the pressure. But there has been one saving grace for buyers: mortgage rates. More