Rumours of a Facebook IPO on trade halt

SPECULATION of an imminent public offering from Facebook has been reignited by the social networking company’s suspension of trading on the private secondary market.

While deal-making will operate as normal, Facebook’s lawyers Fenwick & West will not approve transactions for the remainder of the business week.

Zuckerberg’s empire has said the move is to perform “shareholder record audits” and declined to comment on the probability of a looming IPO.

Unlisted companies sometimes suspend secondary trading before going public or making a big announcement to prevent people buying or selling before others have seen the new information.

Jive suspended trading before floating in December last year. However, Groupon and Zynga, two other prominent tech IPOs from 2011, did not.

Facebook has suspended trading before, in order to review its shareholder list – leading some to deny any link between this week’s move and the imminence of a flotation.

Rumours of an early-2012 public offering from the social networking site have been circulating vigorously in recent months, sparked by expectations that Facebook would reach the 500-shareholder limit for an unlisted company by the end of last year and be required to publish its finances.

The flotation, expected in May, could see Facebook attempt to raise $10bn (£6.4bn), leading to a company valuation of $100bn.

However Sharespost, a service which facilitates trading on the secondary market, currently values Facebook at $74.3bn.

A public offering in the next few weeks would coincide with the eighth anniversary of Facebook, which Zuckerberg launched as thefacebook.com on 4 February 2004.

The company is thought to have brought in around $4bn in revenues last year.