SAN FRANCISCO - WITH so many investors becoming fans of the company, Facebook will be legally required to begin sharing more information about its finances and strategy by April 2012, according to documents distributed to prospective shareholders.
Some of the numbers that began trickling out on Thursday were eye-popping - most notably a net profit margin of nearly 30 per cent, much higher than most people had previously speculated.
The owner of the world's largest Internet social network, privately held since it started in a Harvard University dorm room seven years ago, will be forced to open its books because it expects to have more than 500 shareholders at some point this year, according to a person who has reviewed the documents handed out on Thursday.
The person asked not to be identified because the documents are only being given to an elite group selected to buy a stake in Facebook through a fund packaged by the company's newest investor, Goldman Sachs Group Inc. Surpassing 500 shareholders will catapult Facebook over a hurdle likely to lead to the company's long-awaited initial public offering of stock next year.
After a company with at least US$10 million (S$13 million) in assets has more than 500 shareholders, the Securities and Exchange Commission requires it to disclose its financial results and other details on a quarterly basis in an effort to ensure investors are adequately informed.
The reporting requirement kicks in 120 days after the fiscal year in which a company exceeds the shareholder threshold for the first time. -- AP
