# Facebook IPO and funds raised

**URL:** <https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625>\
**Category:** Factual Questions\
**Created:** [May 21, 2012, 5:20pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625 "2012-05-21T17:20:23Z")\
**Posts on this page:** 6\
**Page:** 1

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**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\
**Post date:** [May 21, 2012, 5:20pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625/1 "2012-05-21T17:20:23Z")

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[A Washington Post story](http://www.washingtonpost.com/business/technology/facebook-set-to-price-initial-public-offering-could-raise-16-billion-or-more/2012/05/17/gIQAJmVAWU_story.html) reported that

> [@Washington Post](#):
>
> The world’s definitive online social network is raising at least $16 billion for the company and its early investors in a transaction that values Facebook at $104 billion.

I assume that by the value, they mean the market cap, which is the market value of all outstanding shares. If the IPO only raised $16B of cash for the company, what happened to the shares that represent the remaining $88B?

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**Author:** ![rat\_avatar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rat_avatar/32/255_2.png) [@rat\_avatar](https://boards.straightdope.com/u/rat_avatar)\
**Post date:** [May 21, 2012, 5:23pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625/2 "2012-05-21T17:23:17Z")

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They are either still held by the company or by previous investors.

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**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\
**Post date:** [May 21, 2012, 5:23pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625/3 "2012-05-21T17:23:22Z")

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The remaining $88 billion is the value already held by Facebook’s existing shareholders prior to the IPO.

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**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\
**Post date:** [May 21, 2012, 5:24pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625/4 "2012-05-21T17:24:08Z")

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> [@CookingWithGas](#):
>
> [A Washington Post story](http://www.washingtonpost.com/business/technology/facebook-set-to-price-initial-public-offering-could-raise-16-billion-or-more/2012/05/17/gIQAJmVAWU_story.html) reported thatI assume that by the value, they mean the market cap, which is the market value of all outstanding shares. If the IPO only raised $16B of cash for the company, what happened to the shares that represent the remaining $88B?

Owned by Zuckerberg (I believe that’s about 20%) and others.

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**Author:** ![leahcim](https://avatars.discourse-cdn.com/v4/letter/l/b4bc9f/32.png) [@leahcim](https://boards.straightdope.com/u/leahcim)\
**Post date:** [May 21, 2012, 5:25pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625/5 "2012-05-21T17:25:02Z")

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Certainly not all of the shares in existence were sold on the open market in the IPO. Zuckerberg no doubt kept some for himself, his employees had some, and the banks that underwrote the IPO got a bunch.

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**Author:** ![isulegig](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@isulegig](https://boards.straightdope.com/u/isulegig)\
**Post date:** [May 21, 2012, 5:41pm UTC](https://boards.straightdope.com/t/facebook-ipo-and-funds-raised/622625/6 "2012-05-21T17:41:37Z")

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Facebook will die in a few years!

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