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.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentregulationinternetFacebookpaypalWeb 2.0 and Web AppsU.S. Securities and Exchange CommissionGov't Legislation/Regulation

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

Sharon Gaudin

Computerworld (US)
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?