Facebook insider trading pumps IPO
Privately held shares are being swapped so frequently that regulators are paying attention.
This is the same problem that forced Google (GOOG) into an IPO perhaps earlier than its founders wanted.
Facebook has issued privately held shares to employees and other investors, and those shares are being traded so much that the Securities and Exchange Commission has asked Facebook for more information about what's going on. The SEC has made similar requests in to Twitter, Zynga and LinkedIn, the Times reports.
Facebook has no desire to make those financial results public, and it got permission from the SEC two years ago to issue restricted stock to workers without registering the securities.
But former Facebook employees and investors are selling their shares on private exchanges, the Times reports, often to wealthy speculators.
Google went public the year after it hit the 500-shareholder mark, the Times reports.
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Bill Stiritz owns more than 5% of the company, and has experienced an estimated $145 million in paper losses on his investment.
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