As Facebook Deal Grows, So Does Cash-Out Opportunity
Facebook has seen a frenzy of demand in the run-up to its initial public offering.
On Monday, the company increased the price range for shares, and 24-hours later, said it would be upping the size of the deal by roughly 25 percent.
It’s presenting some holders with the classic conundrum: stay in, or cash out. As more shares will be sold to the public, it’s given some investors a chance to liquidate sizeable portions of their holdings.
The most notable: hedge fund Tiger Global, which over the course of the last 24 hours has significantly upped the amount of shares it will sell in the deal. Originally slated to offer just 3.4 million shares as part of the offering, the New York-based hedge fund, founded by legendary investor Julian Robertson, will now be cashing out a stake of more than 23 million shares.
If the deal prices at the high end of the expected range, that stake could make the fund more than $750 million richer. Tiger Global is a well-known investor in technology and social media companies — a portfolio which has included positions in Apple , Google , and LinkedIn . The fund has been amassing its Facebook stake for years.
Russian billionaire Yuri Milner is also sitting pretty. His funds (which include Digital Sky Technologies and Mail.ru) are selling nearly a billion dollars worth of additional shares to the market as part of the upsized deal.
And Goldman Sachs , which has a rich history with Facebook deals, will be offloading a stake worth around $570 million if the deal prices well. Goldman is acting as one of the lead underwriters on the IPO — along with Morgan Stanley and JPMorgan .
Facebook insiders Jim Breyer and Peter Thiel are also selling down stakes worth hundreds of millions.
One man not selling any more shares: CEO Mark Zuckerberg. Despite the deal being driven higher in price and size, Zuckerberg will be selling a relatively paltry 30.2 million shares. Even then, it’s mainly to cover a tax expense he’ll incur to exercise a massive chunk of options that will ensure he remains the company’s single biggest stakeholder.
-By CNBC's Jesse Bergman