Market Overview

Is the Facebook IPO Filing Going to Happen or Not?


The chatter about Facebook taking the public plunge and filing for an IPO has been going on for so long now at such a high volume that it is practically deafening. If Facebook's aim is to generate a huge buzz before moving forward, it may have pushed that boat out too far. To be honest, they have become irritating now.

The social networking giant is still trading on secondary markets despite, or perhaps because of, the uncertainty. However, Wednesday morning saw Bloomberg report which states that trading of Facebook on the secondary markets is facing a three-day suspension.

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According to the report, “While buy and sell orders can be made, transactions won't be processed by Facebook's attorneys at Fenwick & West LLC from today until Jan. 27, said the people, who declined to be named because details on secondary transactions are kept private. The halt pertains to trading of Facebook shares only, one of the people said.”

CNN reported that this is not the first time Fenwick & West has temporarily suspended Facebook trading and so people should not jump to the conclusion that an IPO is imminent based on this suspension alone.

It could be a ruse but, if it is, it is not clear what the aim of the ruse would be, besides keeping that buzz going. As things stand, Facebook looks set to benefit hugely from going public.

Bloomberg claims that Facebook is looking to raise approximately $10 billion in an IPO that would value it at over $100 billion. The suspension of trading, therefore, could be to ensure investors cannot buy or sell until all of the information is made public prior to the filing. Again though, let's not jump to conclusions.

Sam Hamadeh, CEO at research company PrivCom said to Bloomberg that, “Facebook and companies who do this don't want to expose themselves to lawsuits related to the fact that some people had it before others and were able to trade on it. The best way to protect yourself is to have no one able to trade.”

Nobody at Facebook or Fenwick & West will comment at present, but it certainly warrants keeping an eye on.

Posted-In: FacebookNews IPOs Trading Ideas Best of Benzinga


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