Facebook, other social networking firms require hefty charges on employees for divesting stocks
Popular social networking site Facebook recently imposed charges of up to $US2500 on company employees for divesting their private stock in an apparent attempt to capitalise on the burgeoning market that trains the attention of investors on similar start-up companies such as Twitter and LinkedIn.
SharesPost chief executive Greg Brogger said that the market for private shares has been expanding for the past six months as he confirmed a Bloomberg report that Facebook has already implemented such charges with game developer Zynga following the lead by requiring a charge of $6000 for sales of its private equity.
Mr Brogger added that the initiatives effected by Facebook and Zynga were only the start as more investors appeared to be attracted by the prospect of potential windfalls being offered by the exploding social networking sites.
According to New York's SecondMarket, the emerging market attractions were drawing enough attentions from venture capital funds and wealthy personalities as it reported that Facebook alone enticed stock sales of up to $150 million since it was unveiled in 2009.
However, analysts said that such scenarios have the potential to overwhelm startup firms, which could be facing complexities in legal and administrative concerns plus the prospect of maintaining efficient management control amidst the influx of non-employee shareholders.
The possibility of government intervention also adds up to the issue as the US Securities and Exchange Commission (SEC) generally gets involve on companies that chalked up more than 500 shareholders.
Facebook though has so far managed to fend off SEC's attention as it convince the agency on 2008 that stocks issued on its employees were restricted from being traded publicly, negating any need for the company to divulge financial data for government consideration.
Since then, Facebook's marketability has ballooned out of proportion and SEC is still out of the picture despite the glaring involvement of both SharesPost and SecondMarket in facilitating for the private purchases of the social networking company's stocks.