SharesPost: This Is Facebook's Last Private Auction

SharesPost says the current auction of Facebook shares is the last one that will take place on a private marketplace.

SharesPost sent out emails to participants stating that the Facebook share auction currently underway is the last one that will occur on a private marketplace, which means that the initial public offer could be around the corner.
The SharesPost email said:

At Facebook’s request, SharesPost will cease facilitating transactions in Facebook stock as of Friday end of day to help ensure the company’s orderly transition into the public markets.

A previous message from SharesPost that went out an hour before said the auction‘s closing date changed to this Friday, March 30 from a previously planned Monday, April 2.
A spokesperson for Facebook declined to comment on the matter; this is the type of issue that the company can’t discuss with the media due to being in a so-called quiet period.
Some are (mis-)interpreting the rescheduling as a halt in trading for three days, something which occurred in the week preceding Facebook’s registration with the Securities and Exchange Commission for a public offer.
PrivCo just sent out an email stating that the auction ending this Friday is the last one to occur on a private marketplace. As the company’s Chief Executive Officer Sam Hamadeh said:

Secondary market trades in Facebook will not trade again on any secondary markets after Friday, at the company’s instruction. So the suspension isn’t temporary, but permanent. Next trades after noon this Friday will be as a public company.

Until now, Facebook share auctions had been occurring consecutively, a new one staring the day after the prior one closes — or at least that’s been the case since the registration filing on February 1.
Even if the postponement relates to the initial public offer, the fact is that next week coincides with many school’s spring break, and making the previously mentioned vacation scheduling a much more feasible explanation. Vacations were the reason was given for the three day suspension of Facebook private share processing during January, which officials said wasn’t caused by the final preparation of documents for submission to the SEC.
Sure, there’s the possibilty that the company might announce a date for an IPO transaction next week, and with that possibly giving a price range for the starting price. Another variation on this might be that the company is preparing for its first ever public disclosure of financial information, as required to do so under the so-called 500 shareholder rule, the same regulation that people are pointing to as a motivator for the company to go public.
A copy of the email that SharesPost sent out an hour earlier appears below.

We are writing to advise you that the closing date for our current Facebook Auction has been changed from Monday April 2nd to this Friday March 30th at noon. All bids are due by this Friday at 12:00 p.m. noon PST.

All other terms of the auction remain the same. This auction is for units of an investment vehicle designated to hold shares of Facebook, Inc. (“Facebook”) initiated by SharesPost Financial Corporation today. The number of shares contractually committed for sale at this auction is 150,000 shares of the Common Stock of Facebook. The reserve price is $38.00 per unit. Each unit held by a successful auction bidder will correspond to one share of Facebook held in the designated investment vehicle. The auction will be conducted on a sealed bid basis.

You will be required to complete a suitability certification to confirm that you qualify as an accredited investor and qualified client under U.S. securities laws and regulations prior to bidding in the auction and holding units of the designated investment vehicle. The administrator of the investment vehicle, SP Investments Management, LLC, is a wholly-owned subsidiary of SharesPost, Inc.

Image courtesy of Shutterstock.



Publish date: March 28, 2012 https://stage.adweek.com/digital/facebook-shares-privat/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT
{"taxonomy":"","sortby":"","label":"","shouldShow":""}