Thursday, March 28

Zuckerberg Sells $500 Million of Facebook Shares in February

Fully committed to his philanthropy work for the Chan Zuckerberg Initiative (CZI), Mark Zuckerberg sold about $500 million worth of Facebook stock in the shortest month of the calendar, according to SEC filings. This rather odd move however does not come as a surprise as Zuckerberg made his intentions public in September 2017.

Mark Zuckerberg’s stock exit comes with a plan. Indeed, he wishes to transfer his Facebook fortune to his philanthropy work for the Chan Zuckerberg Initiative.

Two security filings revealed that Zuckerberg sold 685,000 shares worth 125.4 million in the last few days of February. This takes his total sales of the month to about 2.7 million shares worth $482.2 million.

These sales are the next step in a process Mark laid out in September to fund the Chan Zuckerberg Initiative’s work in science, education and issues related to justice and opportunity. The funds will go to support a range of CZI’s philanthropic activities and operations for many years to come,” a CZI spokesperson said.

In September, he announced he would sell 35 million to 75 million shares of Facebook stock, over a period of one and a half year to fund CZI. The shares are worth $6 billion to $12.5 billion according to current stock prices. In 2016 and 2017, the Silicon Valley billionaire sold about $1.6 billion of Facebook’s stocks, according to website Recode.

Zuckerberg also vowed to donate 99% of his Facebook holdings to CZI, an expensive pledge worth about $50 billion. He presently owns 10 percent of Facebook, and 87 percent of voting shares, according to a company filing in February.

The Chan Zuckerberg Initiative (CZI) is a limited liability company set up on 1st December 2015 by Mark Zuckerberg and his wife Priscilla Chan to celebrate the birth of their first-born child. It aims to “advance human potential and promote equality in areas such as health, education, scientific research and energy.” Unlike a charitable trust, the CZI can be used to make profits, it can spend the money to influence certain policies and make political donations. It also has less transparency obligations compared to a charitable trust.

Finally, under the legal structure of a limited liability company, Zuckerberg will still have control over the Facebook shares owned by the Chan Zuckerberg initiative.

The Chan Zuckerberg Initiative announced in September 2016 a science program, the Chan Zuckerberg Science, with an estimated $3 billion funding in the next 10 years. This program is dedicated to cure, manage and ultimately eradicate all diseases a century from now.

Mark Zuckerberg’s approach to philanthropy reminds us of Bill Gates when the latter quit Microsoft. In August 2017, Bill Gates donated 64 million shares of Microsoft stocks worth $4.6 billion. Before, in 1999 and 2000, he offered $21 billion worth of Microsoft stocks to provide funding for the Bill & Melinda Gates Foundation. After those donations, Bill Gates only owned 1.3 percent of his Microsoft Company. A huge drop from the 24% he previously owned.