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Ex-Facebookers could lose out on stock sale

July 24, 2009

Facebook shareholders got the long-awaited gift of liquidity last week when Russia’s Digital Sky Technologies began buying up to $100 million of Facebook common stock from current and former employees.

The latter group however, may end up with bupkus, as it turns out that the program puts ex-employees at the back of the line.

Only after all of Facebook’s current employees have had a chance to sell their stock to DST for $14.77 a share can former employees step forward to cash out their shares, according to person familiar with the matter.

That’s sensible enough, since the point of the program is to help Facebook’s loyal workers get funds to defray the cost of living in costly Palo Alto, California, and not to line the pockets of people who jumped ship.

But it means that former Facebookers may not get a chance to reap the benefits of their stakes in the world’s largest Internet social network. If Facebook’s current employees use up the $100 million that DST has committed to buying shares, ex-Facebook shareholders are out of luck. And forget about cashing out through an IPO any time soon.

The terms of the DST stock purchase allow Facebook shareholders to sell either $1 million worth of shares, or 25 percent of their total shares, whichever is larger, the person said.

The best hope for ex-employees, the source said, is that DST decides to buy more shares when the current share purchase program ends next month.

Facebook would not comment on the terms of the deal.

Photo: Reuters

Comments
3 comments so far | RSS Comments RSS

I’m completely off-topic but I wanted to draw your attention to a an “odd info”.Nicolas Sarkozy de Nagy-Bocsa the french cocaine-addicted dumb-ass midget is now officially ranked as the “arsehole of the web” by the Google Page Rank algorithm. http://www.lepost.fr/article/2009/07/24/ 1632352_sarkozy-est-le-trou-du-cul-du-we b-google-n-interviendra-pas.htmlPlease, help the French people, spread the word to your colleagues all around the world and publish some articles on this funny and so ironic topic !

Posted by Antoine | Report as abusive
 

Folks better cash in while the good times last.Facebook will just end up like Altavista.all hype, no profit.

Posted by Kelly | Report as abusive
 

“all hype, no profit” I agree it does need a business plan -But Facebook is not about to disappear. There are too many followers, you just need to watch your local news fanclub. It’s now part of many business card just like Twitter & Skype.But if Russian’s company, DST, think there is profit to be made, should anyone be worry, or am I the only one to see some irony.

Posted by Francois Brochu | Report as abusive
 

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