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.
Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz