Friday, January 7, 2011;
The stage is set for a Facebook initial public offering in 2012, according to financial information made available to potential investors.
Documents that surfaced this week show that the Palo Alto, Calif., company expects to exceed 500 shareholders this year, which could force the company to begin making financial disclosures to the public as early as April 2012.
Securities and Exchange Commission rules require companies with more than 500 shareholders to make routine financial filings even if the firms are privately held. Companies have 120 days after crossing that threshold to register as a reporting company. Most companies opt to go public when they are required to make these kinds of disclosures.
Predicting when Facebook will tap the public markets has become a popular parlor game in Silicon Valley and on Wall Street since the popular social networking company launched a private offering of shares through investment bank Goldman Sachs this week. Goldman Sachs participated in a separate $450 million investment that values Facebook at $50 billion.
Documents being circulated by Goldman Sachs to its wealthy clients provide little information on how Facebook makes money, but they do contain some financial details about the company.For example, Facebook earned $355 million in net income in the first nine months of 2010 on revenue of $1.2 billion, according to the documents.
Goldman clients have until Friday to commit to investing in Facebook. Goldman is raising at least $1.5 billion from its clients through the offering.
Facebook officials declined to comment. (Washington Post Co. Chairman Donald E. Graham is a member of Facebook's board of directors.)
- Los Angeles TimesREGULATORS
Holly Petraeus tapped to lead consumer unit
Treasury officials on Thursday officially announced that the wife of the top American general in Afghanistan will head up the creation of the Office of Servicemember Affairs within the newly established Consumer Financial Protection Bureau.
Holly Petraeus, wife of Gen. David H. Petraeus and the daughter of the former superintendent of West Point, has long served as an advocate for military families.
The new office she will help establish within the consumer bureau was created by the financial overhaul bill signed into law last July and will focus on educating military families about financial issues and protecting them from unscrupulous lenders.
- Brady Dennis
Also in Business
l Judge postpones Stanford trial: R. Allen Stanford's criminal trial on charges he led a $7 billion investment fraud was postponed indefinitely Thursday by a U.S. judge while the Texas financier receives medical care for a prescription-drug dependency.
"Nothing can be done until the medical aspect is cleared up," U.S. District Judge David Hittner in Houston told defense lawyers and federal prosecutors after an almost eight-hour hearing examining Stanford's mental competency.
Three psychiatrists, one working for the government and two working for the defense, testified that Stanford's dependency on anti-anxiety medication and the after-effects of a head injury he sustained in a jailhouse beating left him unfit for the trial scheduled to start Jan. 24.
- Bloomberg News