According to the SEC, when it has more than 500 shareholders. Once a company hits that threshold, it must disclose certain financial information. This rule is meant to protect shareholders, and potential shareholders, from the company hiding crucial financial information. The SEC is revisiting the law and its various loopholes now that Facebook has grown and increased the number of its investors.
Several years ago, Facebook began offering stock to its employees as part of their compensation package. However, these employees are not allowed to sell their stock to anyone outside of the company, along with other restrictions. Just this week, Facebook and Goldman Sachs announced a deal that would allow Goldman clients to purchase equity in Facebook. Additionally, a Russian firm recently purchased a 10% stake in the company. What does all this mean for your favorite social networking site? Facebook will almost certainly go public in the not-too-distant future, either by passing the 500 shareholder threshold in its current form, or by the SEC forcing them to through other measures.
Fun Fact: Mark Zuckerberg, the 26 year old founder and CEO, owns about 25% of the company.
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