Facebook IPO
Following on in the theme of my last couple of posts, I’d thought I’d comment on something I heard through the grapevine (internet!).
It seems Facebook could have it’s IPO early next year, filing later this year. Apparently those in the know are estimating $100 billion floatation. If that’s an indicator from those really in the know then I’m going to be bold and say it will be considerably higher.
Facebook doesn’t have to float. It’s a private company with many investors and has bucket loads of cash. However, once they cross 500 private investors they must release quarterly financials just like quoted companies. So, they might as well float, and by doing so it will make it much easier for employees to trade their stock. Something which they can’t do at the moment because
- Private companies are not as liquid as quoted ones (obviously)
- Facebook probably have some employment clauses that prevent employees from trying to privately sell their shares – which has led to some leaving.
So, my take is that it’s a good thing. It will continue to fuel the “feel good” factor in tech companies, creating more opportunities for entrepreneurs to raise finance. Also, for employees with any sort of stock it’s clearly a very good thing!
Something else this got me thinking about was, if you are working for a private company, and you hold some sort of share options and you are staying purely because of this then be weary! In most cases they are structured so a private sale can happen without you seeing a penny – especially where there are multiple investors. Some private investors might exit while others remain, which would not classify as a sale which you can “tag along” to. Your shareholding is almost guaranteed to be linked to your employment so you can’t leave, and you have no way of selling it privately now or later…. so unless a complete buy-out or IPO is about to happen you’ve been f*cked! It’s a great way for employers to retain key employees without having to give any extra benefits or salary increases, but I say ask for the pay rise instead.
