Facebook, Inc. shareholders are being halted from trading shares on secondary markets for three days which leads many to believe Facebook may be filing for the long anticipated Initial Public Offering, IPO. Buy/Sell orders can be made but the trades won’t be processed by Fenwick & West LLC, Facebook’s attorneys, until Jan. 27
Facebook secondary transactions are kept private and as the social-networking site prepares for an initial public offering, investors world-wide have seen marketing schemes like this before to gain attention and build up hype before the pen actually touches paper.
The world’s largest social network is, supposedly, considering raising nearly $10 billion in an IPO which would value Facebook at over $100 billion.
Traditionally, companies planning to IPO suspend trading ahead of a filing to make sure that investors can’t buy or sell until all of the information is public.
Facebook actions would eliminate any exposure to lawsuits related to the fact that some people had information before others and were able to trade on it.
This week’s halt does not necessarily indicate the Facebook filing is happening.
Facebook is calculated to be valued at $73.4 billion on SharesPost’s website. The last contract listed on SharesPost was completed yesterday, January 24, 2012, at $34.50 a share which implies a valuation of $82 billion.
Private exchanges like SharesPost, Inc. and SecondMarket, Inc. allow employees and early stakeholders the ability to sell shares privately, typically to institutional investors.
Bottom Line:
If you wanted to get the Facebook IPO, at least now you have a better idea of what price you will be paying per share.
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