Mark Zuckerberg told Charlie Rose last night that Facebook will go public eventually because it wants to reward employees who’ve been granted stock options and the early investors who believed in the company and helped it get huge.
But if a new law being proposed today passes, Facebook might have one less reason to go public in 2012.
Facebook is set to pass 500 shareholders this year.
Today, the SEC requires any company with 500 shareholders to report financial information within 120 days. As long as you’re reporting, the reasoning goes, you might as well sell your shares to the public. (That reasoning isn’t bulletproof — you might not want to answer to the demands of the broader shareholders even if you do have to report your finances — but it’s supposedly one factor that influenced Google’s 2004 IPO timing, and may have been the reason Facebook used a “special purpose vehicle” for its last round of funding.)
But new legislation in the Senate would raise the limit to 2,000, reports Dan Primack at Fortune.
Earlier this year, the House introduced a bill that would have raised the limit to 1,000 but also changed how shareholders were counted in a way that would have effectively limited that limit entirely. But that bill was amended and is proceeding to the House for a vote later this year.
But with bills winding their ways through both houses of Congress, the 500-shareholder limit could be history soon.
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