January 24, 2012 - Just released by Bloomberg, Facebook secondary market trading is to be suspended for three days this week amid IPO speculation. Bloomberg worked with PrivCo this afternoon for exclusive analysis on this confidential and exclusive breaking story.
PrivCo analysis concludes that a several day freeze on secondary market trading is consistent with an imminent IPO filing later this week. The freeze in Facebook private stock trading will start tomorrow January 25th and will continue at least through January 27th.
PrivCo has previously cautioned investors who consider buying private stock that they should remember that, unlike a public stock, the seller on the other end of the trade is almost guaranteed to be an insider at the company with insider knowledge the buyer doesn't have. Here the liability is simply too great for Facebook to permit and process stock trades and transfers while the IPO filing is being made (often in the middle of the night), with some having access to the now disclosed full financials before others. PrivCo expects that Facebook will continue to allow and process private shares trading hands after a few day cooling off period. The filing from what we know will include the full fourth quarter financials so as to avoid any required S-1 amendments after that for some time. If filed this week, the timing of a potential Facebook IPO filing - between 25 and 28 days after the quarter’s close - is consistent with the amount of time required to close its fourth quarter numbers.
Note: There has been false speculation before on imminent IPO filings, but this is the first time there has been a clear verified signal - a 3 day private shares trading restriction - that is very highly correlated with an imminent IPO filing.