A New IPO-Style Stock Structure for Facebook, But No Official IPO Plans

stocktickFacebook has said for years that it has no near-term plans to go public — and it reiterated that point today when it said that it has created a dual-class stock structure that gives current shareholders 10 times the voting power of new shareholders. Called “class B” shares, this is part of a structure used by some companies to maintain control over voting rights. It lets investors maintain control over the company even if it makes an initial public offering and creates a “class A” set of shares to sell to the public.

The most obvious example of this is Google, which put in a similar structure before its 2004 IPO, although other Silicon Valley companies have similar structures, like Facebook platform social gaming company Zynga.

Here’s the official statement Facebook sent us:

Facebook is a private company so we don’t typically share details on stock-related matters.  But we did introduce a dual class stock structure because existing shareholders wanted to maintain control over voting on certain issues to help ensure the company can continue to focus on the long-term to build a great business.  This revision to the stock structure should not be construed as a signal the company is planning to go public.  Facebook has no plans to go public at this time.

So there we have it. It’s a new structure. This does not materially change the vague timeline that the company has previously suggested for its IPO plans. Earlier this year, Facebook appeared poised to wait awhile for an IPO. It let outside investor Digital Sky Technologies buy stock from current as well as former employees.

Social Media 101

Mediabistro Course

Social Media 101

Get hands-on social media training for beginners in our online boot camp, Social Media 101! Starting September 4, social media and marketing experts will teach you the best practices to be successful on social. Register before July 31 to get $50 OFF with early bird pricing. Register now!

 

Leave a Reply

One Response to “A New IPO-Style Stock Structure for Facebook, But No Official IPO Plans”

  1. Startup Toolbox » Blog Archive » Class A/B Stock Structures says:

    [...] A New IPO-Style Stock Structure for Facebook, But No Official IPO Plans (insidefacebook.com) AKPC_IDS += "2947,"; Tags: Class A/B, Facebook, stock [...]

Get the latest news in your inbox
interested in advertising with inside facebook?

Social Media Jobs
of the Day

SEO Strategist

Hanley Wood
Washington, DC

Analytics and Operations Associate

AL D͍A News Media
Philadelphia, PA

SEO Manager - Bilingual

CREATIVE CIRCLE
Miami, FL

SEM Manager - Bilingual

CREATIVE CIRCLE
Miami, FL

Newswire Editor

PR.com
New York City / Long Island, NY

Featured Company

Join leading companies like this one and recruit from the nation's top media job seekers on the Mediabistro Job Board. Every job post comes with our satisfaction guarantee. Learn More
 

Our Sponsors

Also from Inside Network:   AppData - Facebook & iOS Application Stats   PageData - Engagement Data on Facebook Pages   Facebook Marketing Bible   Inside Network Research
 
home | site map | advertising/sponsorships | about | careers | contact us | help courses | browse jobs | freelancers | events | forums | content | member benefits | reprints & permissions terms of use | privacy policy Copyright © 2014 Mediabistro Inc. call (212) 389-2000 or email us