Zuckerberg to raise $1 billion cash from Facebook IPO

@CNNMoneyTech May 3, 2012: 6:06 PM ET
Facebook founder Mark Zuckerberg will collect $1 billion from Facebook's IPO, but he plans to hand almost all of it over to Uncle Sam to pay his taxes.

Facebook founder Mark Zuckerberg will collect $1 billion from Facebook's IPO, but he plans to hand almost all of it over to Uncle Sam to pay his taxes.

NEW YORK (CNNMoney) -- Let's hope Mark Zuckerberg has deep pockets in his hoodie.

The Facebook CEO plans to sell 30.2 million shares of his stake in the social network when it publicly offers its stock later this month. If the company's IPO prices at the top of its $28 to $35 per-share range, Zuckerberg would pocket a "cool" $1.1 billion.

However, most of that cash will go straight to Uncle Sam and California. Zuckerberg plans to partially exercise a major stock options grant, and will use almost all of the cash he raises from his IPO sale to pay off the taxes on that maneuver.

But even after the tax man takes his bite, Zuckerberg will be a paper billionaire. His remaining 504 million shares will make him worth $17.6 billion if Facebook hits the top of its IPO range -- enough to make him one of the 50 richest people on the planet, by Forbes' calculation. Bloomberg has already give him a spot in its Billionaires Index.

It will be the Facebook CEO's biggest payday by far, though he has collected plenty of cash over the years. Last year, he made $483,000 in salary, took home a $220,500 bonus, and received additional perks like private jet travel valued at $783,000.

Zuckerberg isn't the only one making gobs of money on Facebook's IPO.

Investor Peter Thiel, who put up $500,000 to get Facebook through its first summer of operations, now owns a 2.5% stake in the company. He plans to sell a chunk of stock on IPO day that could be valued at $271 million, assuming a $35 per share pricing.

Accel Partners, the first major venture capitalist to fund Facebook, owns around 11% of the company. It invested $12.7 million in April 2005, and plans to raise $1.3 billion in cash through share sales. Not a bad turnaround.

The Russian venture capital group DST Global, with its 5% stake, plans to sell $919 million worth of shares on IPO day, and Russian social networking company Mail.ru Group will sell shares valued at up to $392 million.

But some high-profile Facebook shareholders won't be selling any of their stock on IPO day.

The social network's No. 2, Sheryl Sandberg, is hanging on to all of her stake, which will make her a paper billionaire. Same for Facebook co-founder Dustin Moskovitz, who has the third-largest ownership holding in the company. His 8% stake could be worth roughly $4.7 billion on IPO day, and he's not cashing out yet.

Facebook's latest regulatory filing suggests that the company's Russian investors worked some backroom deals with the social network last month, negotiating more lenient "lock-up agreements," which dictate when investors can sell off their holdings.

Mail.ru and DST can now sell roughly a quarter of their shares after three months, another eighth after seven months and the rest after a year.

Facebook's previous filings mandated a six-month waiting period before the pair could make any post-IPO share sales, and required them to wait 18 months before entirely unloading their holdings.  To top of page

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