Facebook creates dual class structure; No plans for IPO yet

Facebook creates dual class structure; No plans for IPO yet

Summary: Facebook has created a dual class structure that could be seen as a move to lay the groundwork for an initial public offering. However, the company said there are "no plans to go public at this time."

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Facebook has created a dual class structure that could be seen as a move to lay the groundwork for an initial public offering. However, the company said there are "no plans to go public at this time."

Facebook, a private company whose valuation is watched almost as closely as if it were publicly traded, responded to a Wall Street Journal report on the dual class set-up. Dual class shares give a some shareholders more voting power over others. Google set up a dual class structure before its IPO.

In a statement Facebook said:

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.

That's the official line, but it's pretty clear that Facebook is keeping its IPO options open. The company isn't going public today, but the groundwork is being laid for an eventual offering. At least Facebook will be used to the scrutiny. Usually dual class structures in private companies are quiet affairs.

Topics: Banking, Legal, Social Enterprise

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