This is a bar graph of the $ value of shares that large Facebook share

Question

https://gmatclub.com/forum/download/file.php?mode=view&id=53593 This is a bar graph of the $ value of shares that large Facebook shareholders sold at the IPO date. According to the chart, Zuckerberg was slated to sell GRAPH_1_PLACEHOLDER times more Facebook stock in dollar value than Mark Pincus, founder of gaming company Zynga, was slated to sell. Based only on the data shown in the chart, the total $ amount of Facebook shares to be sold at IPO, if priced at $35, was closest to GRAPH_2_PLACEHOLDER . g.jpg

Apt0810 · Answer

1)B,since Zuckerberg has 846 million $ share while Mark Pincus has 35 million $ to sell so 846/35=24.171

2)A,since sum of all values in the graph which are in light blue colour: 1337+1057+919+462+394+271+245+245+229+162+118+35+33= $5.5B

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SidT1026 · Answer

Why did we take 846 million $ for Zuckerberg? He also has shares worth 1057 million dollars where price of each share is $35 right? So isn't the total value for Zuckerberg's share = 846 + 1057?

Sajjad1994 · Answer

Please mention the question number you are referring to.

Thank you!

zlishz · Answer

Hi, 
In question 1, can you please explain why did we not consider Zuckerberg having 1057 mil. shares too? Why did we only consider 846 mil.?

Thank you.

SidT1026 · Answer

Hi the question I am referring to is question number 1

Sajjad1994 · Answer

You are misinterpreting the graph, see the scale from x-axis. 0 ...... 1500

The figures given are not two different; rather, the second one is the total. Mark Zuckerberg has shares worth a total of 1057 million; among those, 846 million have a face value of $28; and the rest, (1057-846), 211 million shares have a face value of 35$ each. The calculation will work as follow:

1057/35 = 30.2

Answer: 24 and 30.

iampm1 · Answer

but earlier you did 846/35 in your previous comment? was that wrong then?

Bunuel · Answer

Yes, that should have been 1057/35, not 846/35.

dothitmotw · Answer

can you please give full solution to this question?

thank you

Bunuel · Answer

Zuckerberg planned to sell shares worth about 1,057 million dollars, while Mark Pincus planned to sell about 35 million dollars. 1,057/35 is roughly 30, so Zuckerberg was slated to sell about 30 times more in dollar value than Mark Pincus.

At the $35 share price, the combined value of all shares to be sold (the darker bars) is:
 1,337 + 1,057 + 919 + 462 + 394 + 271 + 245 + 245 + 229 + 162 + 118 + 35 + 13 = 5,487 million dollars, or about 5.5 billion dollars in total.

gullyboy09 · Answer

Hi  Bunuel , can you please clarify on the second part. My understanding of the graph as Sajjad mentioned above is -  Mark Zuckerberg has shares worth a total of 1057 million; among those, 846 million have a face value of $28; and the rest, (1057-846), 211 million shares have a face value of 35$ each. Then why you used 1057 completely below? Also, if to be assumed all shares are worth 35$ and then we need to calculate, then we might need to multiply the shares worth of $28 by 35/28, and here in this case 846*(35/28)+211 would be the actual value.

egmat · Answer

Hi gullyboy09,

I can see exactly where this is coming from. You built your reading on Sajjad's line that "846 million have a face value of $28; and the rest, 211 million, have a face value of $35." That phrasing is what's tripping you up, because it makes it sound like there are  two different lots of shares . There aren't.

What the two bars actually mean.  Each shareholder is selling  one fixed bundle of shares  - a single number of shares. The chart shows what that  same  bundle is worth under  two possible IPO prices :

- Dark bar ($ 28  per share) - Zuckerberg's bundle =  846 
- Light bar ($ 35  per share) - the  same  bundle =  1,057

They're the same shares, just priced two ways - not  846  worth plus an extra  211  worth.

Quick check that proves it.  How many shares does Zuckerberg actually hold?
-  846  /  28  ≈  30.2  million shares
-  1,057  /  35  ≈  30.2  million shares

Same  30.2  million shares both times. That's the giveaway that the two bars describe one bundle, not two.

Now your own adjustment idea - it's actually right, and it lands on 1,057.  You suggested scaling the $ 28  value up to $ 35 :

846  × ( 35 / 28 ) ≈  1,057

That  is  the light bar. So the $ 35  value already includes the price bump - there is no separate "+ 211 " to tack on. When Q2 says "if priced at $ 35 ," you just read the light bars directly. That's why  1,057  goes straight into the sum, and the total of all light bars comes to about $ 5.5B .

So your instinct to convert was correct - you just didn't realize the chart had already done that conversion for you in the second bar.

Answer: Between 24 and 30

This is a bar graph of the $ value of shares that large Facebook share

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This is a bar graph of the $ value of shares that large Facebook share

Prep Toolkit

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