Because it is nearing the SEC's 500-private shareholder threshold, the social network may need to start supplying its financials to the public by 2012.
people outside the inner core of Facebook leadership really know much about the
income, profits and cash flow of the world's largest and most successful social
network, but that will soon change.
Wall Street Journal reported Jan. 6 that the Palo Alto, Calif.-based Web
services network will be required by federal securities law to publicly
disclose its internal financial information or schedule an initial public
offering by April 2012, because it expects to cross the 500-private shareholder
legal limit at some point this year.
Journal reported that a private-placement memo is being distributed to
potential investors in Facebook. A Facebook press representative declined to
comment in response to a query by eWEEK.
and co-founder Mark Zuckerberg has made it clear numerous times that he is not
interested in taking Facebook public, but he may have to rethink that position.
He also has turned down a handful of offers to sell the company in the last
U.S. Security & Exchange Commission's 500-shareholder disclosure regulation
requires companies to begin publicly disseminating financial information 120
days after the end of their fiscal year, which for Facebook falls at the end of
the calendar year in December 2011. This makes April 2012 the first month in
which the company would have to start disclosing its financials.
which is closing in on 600 million registered members, has been building
corporate value steadily since its launch by Zuckerberg in 2004. Two years ago,
the company attracted an initial $200 million investment from Russia's
Digital Sky Technologies, which recently increased that to a total stake of
about $500 million.
Street investment firm Goldman Sachs reportedly has invested $450 million into
Facebook, according to the New York Times. The combination of all of its
private investments unofficially has the company valued at about $50 billion,
easily ranking it as one of the most valuable companies in the world.