Facebook Readies For May IPO Release: Halts Secondary Market Trading

Facebook has issued directives to halt trading of its shares on secondary markets. A move clearly indicating preparations for an IPO release this May.

The social networking giant has specifically asked firms that facilitate trading of its privately held shares to stop doing so by next week. This move is intended to stop the changes in valuation of its shares. It is a vital step meant to form a firm basic valuation & prevent complications as Facebook inches closer to a IPO release.

Facebook has set the bar high with aim to raise at least US$ 5 Billion. If it manages to do that, the firm will be valued at whopping US$ 100 Billion which is highest for any company in the Silicon Valley history!

The Securities and Exchange Commission (SEC) has to declare the firm’s prospectus ‘Effective’. It was not able to do so since Facebook has amended its prospectus three times since filing paperwork to go public in early February. Each prospects has given us interesting tidbits about who Facebook considers its rivals & how it should gear up for the time to come.

Despite being publicly listed, Facebook’s founder & CEO Mark Zuckerberg will control 56.9 % of the company’s post-IPO voting shares. Meaning every decision taken by the board of directors can be simply overturned by Zuckerberg. However, at a recent meeting where many banks & financial institutions convened, Facebook executives suggested that Zuckerberg will not be very involved with Wall Street. Investors have long demanded Facebook’s shares be made available on primary markets.

Facebook wants it script be traded under the name FB, but nothing’s concrete yet. While prepping for the IPO we expect some more news to trickle down. Stay tuned.

 

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