How Mark Zuckerberg Plans to Use Facebook to Fund Charity Projects ?


Social media giant Facebook has announced impressive March quarterly results with a revenue growth exceeding more than 50 percent and beat the projections of Wall Street analysts.

The shares rose 9.5 percent in the afternoon trading on Wednesday to $118.39 and set a new high. Significantly, the company also proposed the creation of new class C shares under which existing shareholders having A or class B shares will be getting two C shares. This is to allow CEO Mark Zuckerberg to go ahead with his plan to sell some of his shares while retaining the control of the company, reports CNBC.

The new non-voting shares will allow Zuckerberg to give away 99 percent of the wealth to charity by selling non-voting stock without losing control of the company. Zuckerberg and wife Priscilla Chan had announced in 2015 that they would give away 99 percent of their Facebook shares to fund charitable actions.

The announcement did not shock investors as they were confident of the company’s ability to grow and exceed expectations if the founder’s control will stay undisturbed.

“Facebook has always been a founder-led company so we can focus on our mission and build long-term value,” Zuckerberg said, justifying the new share proposal, at the company’s earnings call.

The quarterly results had the total revenue rising to $5.38 billion from $3.54 billion, with a huge spurt in ad revenue by 56.8 percent to touch $5.20 billion. In total ad revenue, mobile ads accounted for 82 percent of the total earnings compared to 73 percent a year earlier. Analysts had expected a revenue of $5.26 billion.

The results were a demonstration of FB’s success in attracting advertisers, which expanded the operating profit margin to 55 percent from 52 percent of 2015. The ad spurt was driven by wildly popular mobile apps and live videos. The trend of advertisers focusing more on web and mobile platforms than TV is helping Facebook considerably.

Calling the operating margin a good surprise, Wedbush Securities analyst Michael Pachter said:  “The Company consistently ‘warns’ about higher spending, but they consistently manage their spending to deliver earnings upside. They’re an impressive company, and they leave very little room for criticism.”

Zuckerberg said the monthly users of Facebook have surged to 1.65 billion as of March 31, in contrast to 1.44 billion a year ago, Reuters reported.

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