Mark Zuckerberg has a smile on his face and why shouldn’t he? After the unprecedented success of LinkedIn’s IPO (initial public offering) Facebook, the social networking site and one of the most watched companies around the world is planning an IPO in Q1 of 2012 which is being valued at upwards of $100 billion. The IPO is said to be triggered by section 1934 of the United States Security and Exchange Act. A rule within the act dubbed “500 rule” states that any company with 500+ investors is required by law to make public, quarterly financial statements. This legislation was introduced in 1933 and enacted in 1934 to protect investors by combatting fraud by allowing them full financial disclosure on companies which they invest in. At Facebook’s rate of investor growth this number will be reached most likely in January 2012 and no later than April.
Last year Facebook put constraints on employees abilities at sell their shares privately to outside investors; however in light of this IPO those employees who might have had grievances with the policies will, in all likelihood, end up happy campers when they take a look at their bank statement.