Facebook formally sliced up its stock in a 5-for-1 division on Friday — a move designed to keep the price of individual shares lower as demand for the privately owned social-networking site on secondary markets has been driving it upward.
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"The reason is that the stock has risen significantly since our last split, and this allows us to bring it into a similar price range as other private companies," Facebook spokesman Jonny Thaw told ZDNet UK's sister site CNET News. "It also allows us to give everyone larger stock unit grants without increasing dilution for shareholders."
It is the third time in Facebook's six-year history that the company has undergone a split of its shares, following a 4-for-1 division in July 2006 and another in October 2007. Splitting stock is not an uncommon practice, considering that when individual share prices grow very high it can limit their growth. A lower share price can make the stock more accessible to small-time investors.
For more on this ZDNet UK-selected story, see Facebook announces 5-to-1 stock split on CNET News.
