Zuckerberg Sold 30.2 Million Facebook Shares — Mostly to Pay the Tax Man

Facebook's IPO made Mark Zuckerberg a billionaire many times over on paper — but it also handed him one of the largest personal tax bills in American history.

In the offering, Zuckerberg sold 30.2 million of his own shares at $38 apiece, raising about $1.15 billion. The sale wasn't about cashing out to buy yachts. He was exercising 60 million stock options in connection with the IPO, and the bulk of the proceeds went toward covering the taxes owed on that exercise — a bill estimated in the billions.

Even after the sale, Zuckerberg retained overwhelming control of the company: his remaining shares carried supervoting rights, leaving him with majority voting power despite owning a minority of the equity. Facebook's dual-class share structure meant the IPO changed his wealth, not his authority.

He wasn't the only insider selling. Early investor Peter Thiel and others also sold portions of their holdings in the offering — standard practice in large IPOs, and a reminder that for the people closest to the company, the public debut is as much a liquidity event as a fundraising one.

The irony was hard to miss: the same week Facebook's stock was disappointing public investors, its founder was writing the IRS the biggest cheque of his life.

This article summarizes Facebook's IPO filings and contemporaneous reporting from May 2012.