Mark Zuckerberg: Facebook Will Not Go Public Anytime Soon

When Google was considering the timing of its IPO back in 2003/2004, I remember reading about an SEC regulation that requires private companies to make regular public disclosures (10K filings) if they hit certain shareholder and asset thresholds. There was some speculation that this regulation may have played some part in forcing Google to go public sooner rather than later.

I don't know where/how it figures into Facebook's thinking, but it may be that the same issue may arise in which a private Facebook might face some of the public scrutiny a public corporation might and decide that if they must disclose, they may as well reap some of the benefits of going public.

For what it's worth, here's the specific reporting obligation I'm referring to as noted in a Wikipedia article (since I can't find it on the SEC website):

"Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports, regardless of whether the securities are publicly or privately traded."

http://en.wikipedia.org/wiki/Form_10-K

In asserting that Zuckerburg's fears are unfounded, the author states, "Google co-founder Sergey Brin also echoed Zuckerberg’s “hell no we won’t IPO” sentiments soon before Google, yes, went public."

The quoted text is a link to an article whose first line is the following:

"We are profitable, and we don't need the cash. But it might be nice to have the currency" of a public company, Brin said ....

Brin does go on to state that being a public company may be a distraction, but this is hardly a wholesale dismissal of the possibility of going IPO. In fact, Brin is later quoted as saying that "[t]here's a good chance eventually [Google's] going to do it."

I don't know if this has been misrepresented before, but you all may be witnessing the first round in a new game of "telephone"!

Most of the negative effects he describes of an IPO could be mitigated by a dual class stock structure similar to Google's. I expect we'll see that when Facebook does IPO.

Given the active secondary / private markets for high profile private companies, such as sharespost and DAG ventures, the pressure to go public to give the employees a payout has been greatly diminished. Particularly where companies like Facebook are actively blessing private placements, and waving the ROFR, employees are pretty much getting most of the IPO benefits. I'm not sure how much of this is a result of SOX, and how much is a result of squeamish CFOs not wanting to have to subject themselves to the requirements for transparency and predictability that the street requires - but we're certainly seeing a lot of private companies stay private a year longer than we did a decade ago.

As Zuckerberg is a basically a sociopath, I don't consider this particularly meaningful. It's probably intended to be manipulative in some way.

Get ready for IPO...

Of course not. Then they'd be more open for scrutiny.