Social-networking site Facebook is halting the sale of its shares on secondary markets effective next week as the company prepares to hold its initial public offering (IPO) in May, according to a person familiar with the matter.
Facebook recently asked firms that arrange trading of its privately held shares to stop doing so, a move intended to reduce churn in its valuation that could complicate matters as it sets an IPO price, another person familiar with the matter said.
Facebook is planning to raise US$5 billion in an offering that could value the company at up to US$100 billion, making it the largest IPO in Silicon Valley history.
The May time frame for the high-profile IPO is dependent on the US Securities and Exchange Commission declaring the company’s prospectus effective, the first source said. Facebook has amended its prospectus three times since filing paperwork to go public early last month.
A Facebook spokesman declined to comment.
The company has said it wants its shares to trade under the ticker FB, but has yet to announce which exchange it will list its shares on.
As Facebook moves toward its IPO, some investors are raising concerns about Facebook’s dual-class share structure, which will give Facebook chief executive Mark Zuckerberg control of 56.9 percent of the company’s post-IPO voting shares. At a recent meeting with financial analysts and investors, Facebook executives suggested that Zuckerberg would not be very involved with Wall Street.
Despite the criticism, investor demand for equity in Facebook has burned strong for years, with shares of Facebook trading briskly in special secondary markets for private company stock.