FACEBOOK employees in the UK are set to cash in from the company’s initial public offering (IPO) this year, with London-based employees sitting on $146m (£91.2m) in shares.
The social media giant’s UK accounts, published on Companies House yesterday, revealed that Facebook handed out around 7.3m shares in the company to London staff before it went public in May. At Facebook’s current share price of around $20, this would net the 90 staff the company employed at its Covent Garden office last year around $146m – an average of $1.6m, or £1m, each.
Some staff, including EMEA vice president Joanna Shields, will have earned far more shares than the average, although the majority of Facebook’s UK staff last year were advertising sales people.
The company now employs more than 100 people in the UK, having opened an engineering office in London – the first outside the US.
The vast majority of the shares will vest on 14 November – six months after Facebook’s IPO – while the remaining shares will become unlocked next year.
However, even with the upcoming windfall, employees have lost millions on paper since May’s IPO, with the share price sliding from an initial $38 to just over half that today.
This price is expected to slip even further when thousands of employees are first able to sell stock at the end of a “lockup period” on 14 November.
Shares fell around seven per cent in August when 271m shares flooded the market at the end of a lockup period for early investors, although November’s vesting date is expected to be far more significant.
Around 1.32bn shares – more than double the current free float – will be unlocked on 14 November, and with the majority owned by Facebook employees rather than early investors, analysts expect a wave of selling as staff attempt to cash in before any further falls.
Shares in the company slipped by more than 2.5 per cent yesterday as the US Securities and Exchange Commission (SEC) published emails between Facebook and the SEC suggesting that the firm had tried to play down the risks associated with more users visiting it via smartphones ahead of May’s IPO.
Facebook UK’s accounts published yesterday revealed that the firm paid just £238,000 in corporation tax last year. Facebook, like many other companies, channels UK revenues via Ireland.