Facebook IPO Comes Soon If The CEO Changes His Tune

By Jackie Cohen Comment

Facebook Chief Executive Officer Mark Zuckerberg has finally changed his tune about selling stock to the public, according to the latest chorus of rumors.

Zuckerberg has allegedly said he wants to keep the company private but now Facebook employees are reportedly telling each other that the CEO has finally changed his tune.

The source of this rumor is worth calling into question: an unnamed individual who’s close to Facebook employees told Business Insider that over the past six weeks, people in the company have been chattering about a possible filing with the Securities and Exchange Commission for an initial public offering.

WebProNews and ZDNet’s Friending Facebook Blog have parroted Business Insider’s report, along with the idea that Facebook has to go public now that the company has exceeded 500 shareholders, requiring quarterly public disclosures of financial performance starting as soon as April.

However, SEC Chairwoman Mary Schapiro has asked Congress to advance legislation that, if passed, would enable Facebook to remain private even with 500 or more shareholders, but lawmakers have yet to pass anything to this effect.

We agree with TechCrunch‘s suggestion that the motive for a Facebook IPO isn’t compliance but rather to reward employees, by making the stock they already own in the company more liquid.

But the SEC’s suggestions to Congress have included allowing companies with 500 or more shareholders to not have to disclose financial data publicly, which might motivate companies to issue more stock privately, which in Facebook’s case could mean giving more stock to employees without having to go public to do so.

However, these changes would have to go into effect by April in order to keep the social network from going public.

Meanwhile, Facebook stock continues to enjoy some liquidity on private marketplaces, namely SharesPost.

Do you think Facebook will do an IPO within the next year, or will legislation enable the company to stay private?