Facebook said it intends to breach a critical 500-shareholder limit this year, meaning it will be forced to begin disclosing financial information or stage an initial public offering by April 2012, according to a new 100-page private-placement memo being distributed to potential investors in the company.
Crossing the limit triggers a Securities and Exchange Commission rule that requires that companies file financial information, even if they don’t trade publicly.
The social-networking website’s intentions have been under heavy debate since the company launched a private-share offering through Goldman Sachs this week. Some investors have wondered whether the arrangement with Goldman was designed to avoid such disclosures. The document makes clear that isn’t the case and that Facebook will likely be a publicly traded company in 2012.
Meanwhile, LinkedIn may be the first company to quench investor thirst for the red-hot social networking market. The site that connects more than 85 million professionals has been quietly preparing an initial public offering for as early as the first quarter, the Los Angeles Times reported.
LinkedIn has hired Bank of America Merrill Lynch, Morgan Stanley and JPMorgan Chase to advise it after a round of interviews in November. Its implied valuation on the private trading marketplace SharesPost is $2.2 billion.
