A rumor is floating around that Facebook will be going public in 2011. What started the rumor? An SEC, the Securities and Exchange Commission, not the Southereastern Conference, investigation. Even though Facebook is a privitely held company, it still issues shares. By law unless Facebook goes public they must keep the number of shareholders in their private company to under 500, but those 499 shareholders can then buy, sell and trade their stock without any oversight and that is what the SEC is irked about.
The SEC believes the unregulated shares have caused Facebook's value to be inflated by billions of dollars. Facebook really doesn't want the SEC to investigate them since some of the trades may not have been kosher and there may be over 500 shareholders. Because of this, Facebook can decide to become a public company and avoid the SEC investigation.
This is not unheard of. Google was forced to go public in 2004 to overcome the 500 shareholder rule. So Facebook really has two options, either buy out the shareholders or go public. Both have advantages and disadvantages, so it will be interesting to see what they do. [SF Gate]
if this where to happen..... EPIC would be the word of the day ;)
ReplyDeleteUnfortunately, it may not happen now. See our story here: http://tehgaygeek.blogspot.com/2011/01/facebook-investment-may-keep-it-private.html
ReplyDelete