Facebook share suspension sets IPO rumours running

Facebook share suspension sets IPO rumours running

Facebook has suspended trading of its shares on the private secondary market until the end of the week, raising expectations that it will shortly file for its long-awaited initial public offering (IPO).

Facebook is renowned for closely guarding the details of its financial performance, but would have to give key figures in IPO documents filed with the SEC.

Shareholders can still place buy and sell orders, but the transactions will not be approved by the social network's lawyers until January 27, according to US reports.

The pause in trading is not the first from Facebook – the company has previously put a stop on transactions in order to assess its shareholder profile. However, the company is expected to make its IPO in the third week of May, so the suspension adds to a growing body of evidence.

Companies are not requires to suspend their trades before an IPO, but often do so before material announcements in order to protect themselves against potential claims of insider dealing.

Facebook is renowned for closely guarding the details of its financial performance, but would have to divulge key figures in IPO documents filed with the Securities and Exchange Commission (SEC) by the middle of next month, if it is to meet that target.

When it finally comes, the flotation is expected to value the business at about $100bn (£64.4bn), making it the biggest technology flotation in history.

source: telegraph.co.uk