Facebook eyes possible IPO, public financial disclosures

Social networking site reportedly nears critical shareholder threshold

Just days after news surfaced that Facebook had received a massive cash infusion, reports are out that the social network is preparing to disclose financial information or prepping for an initial public offering.

The Wall Street Journal reported Thursday afternoon that Facebook is on the cusp of gaining 500 shareholders, an invisible line enforced by the U.S. Securities and Exchange Commission (SEC) that will force the company's hand.

Citing a 100-page memo reportedly distributed to potential company investors, the Journal noted that Facebook expects to cross the 500-shareholder threshold this year. Once it does, SEC rules dictate that the company file financial information, regardless of whether the company is traded publicly.

That report comes just a few months after Facebook board member, venture capitalist and PayPal co-founder Peter Thiel said that Facebook was looking at making an initial public offering sometime after late 2012.

The Journal also reported that the Facebook memo notes that the social networking company will "likely" be a publicly traded company by next year.

"I think that [CEO Mark] Zuckerberg is wise to put off going public for a while," said Dan Olds, an analyst with The Gabriel Consulting Group. "Facebook has done a great job at building up a massive number of engaged users and there is big value in that. But this is a company that is going to get a huge amount of scrutiny from every direction and they need their ducks in a row before going public."

Olds added that Facebook executives will need to make sure they have several things in place, including management controls and compliance mechanisms.

Facebook made big news earlier this week when reports hit that the company had just received a $500 million infusion of cash from global investment bank Goldman Sachs and a Russian investor. Goldman Sachs valued the company at $50 billion.

This news also comes on the heels of widespread speculation in the past day that another social networking company - LinkedIn - is working on an IPO of its own.

Reports are rampant that LinkedIn actually will beat out social networking heavyweights like Facebook and Twitter to the IPO gate.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Sharon Gaudin

Computerworld (US)
Topics: U.S. Securities and Exchange Commission, Gov't Legislation/Regulation, regulation, Web 2.0 and Web Apps, paypal, internet, government, Facebook
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?