Facebook 2012 Annual Report Download - page 38

large number of shares of our common stock available for sale. As of December 31, 2012, there were
1,671,277,621 shares of our Class A common stock and 701,427,574 shares of our Class B common stock
outstanding. Shares of our Class B common stock are convertible into an equivalent number of shares of our
Class A common stock and generally convert into shares of our Class A common stock upon transfer.
As of December 31, 2012, substantially all of our outstanding shares are available for sale into the market,
except for 47,315,862 shares held by Mail.ru Group Limited and DST Global Limited and their respective
affiliates, which will be eligible for sale in the public market on May 18, 2013, and 426 million outstanding
shares and 60 million shares issuable upon the exercise of an option held by Mark Zuckerberg. Mr. Zuckerberg
has informed us that he has no intention to conduct any sale transactions in our securities until at least September
2013.
If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock
price could decline.
The trading market for our Class A common stock depends in part on the research and reports that securities
or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade the
rating of our Class A common stock or publish inaccurate or unfavorable research about our business, our
Class A common stock price could decline.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future
earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any
dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A
common stock if the trading price of our Class A common stock increases. In addition, our credit facilities
contain restrictions on our ability to pay dividends.
If we are unable to implement and maintain effective internal control over financial reporting in the future,
investors may lose confidence in the accuracy and completeness of our financial reports and the trading price
of our Class A common stock may be negatively affected.
We are required to maintain internal controls over financial reporting and to report any material weaknesses
in such internal controls. In addition, beginning with our 2013 Annual Report on Form 10-K to be filed in 2014,
we will be required to furnish a report by management on the effectiveness of our internal control over financial
reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We are in the process of designing, implementing,
and testing the internal control over financial reporting required to comply with this obligation, which process is
time consuming, costly, and complicated. If we identify material weaknesses in our internal control over
financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert
that our internal control over financial reporting is effective, or if our independent registered public accounting
firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting,
investors may lose confidence in the accuracy and completeness of our financial reports and the trading price of
our Class A common stock could be negatively affected, and we could become subject to investigations by the
stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require
additional financial and management resources.
The requirements of being a public company may strain our resources and divert management’s attention.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended , the
Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NASDAQ Global Select Market, and
other applicable securities rules and regulations. Compliance with these rules and regulations has increased and
may/will continue to increase our legal and financial compliance costs, make some activities more difficult, time-
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