With hints of a potential I.P.O. through its Goldman Sachs Group, Inc. (NYSE:GS) funding and press releases, many assume Facebook will go public in 2012. But it’s reason to do so is a different one: make its large corp. of employees happy.
While the financial pressure to go public my be increasing internally at the company, Facebook could be thinking it’s time to payback its hardworking employees. In the past, the company has used to standard stock option plans to reward its employees during the early years but switched to restricted stock units in 2008.
This stock type can only be sold after the company goes through an I.P.O; Facebook has restricted its current employees from selling any stock they own but not it’s former employees.
All employees had been allowed to sell small portions of their options in late 2008 to 2009 but the new one who receive restricted stock don’t have these same financial opportunities.
Is it time reward them with an IPO payday?
Rumors have been swirling lately that Facebook is moving toward a 2012 IPO. Business Insider is reporting today that “a Facebook S1 filing is coming really soon. Possibly as soon as next month.”
While an IPO could pressure the company for short-term profits rather than a long-term outlook, the reason for Facebook’s IPO delay is more difficult to understand. Many use the 500-shareholder rule as the rationale for Facebook to go public in 2012, but with the company’s public document filings and Congress’ new bill raising the shareholder rule to 2,000, it’s less of a concern.
Questions linger on the effect on a Facebook IPO. Can the company keep its talented engineers and product managers? Can it grow its revenue like it competitors? Can it maintain its vision?
Stay tuned for an interesting 2012.
Further Reading: Facebook Can’t Woo the Fortune 500>>