Facebook is making moves that could clear the way for the company to go public at some point next year, according to documents sent to Goldman Sachs clients selected as potential investors.
Facebook reportedly reached an agreement recently that would allow a select group of Goldman clients to invest $1.5 billion in the social networking firm, which is currently privately held.
The deal would be structured so all of the investors would count as one client in order to avoid rules that force private companies to disclose their financial results once they have more than 500 shareholders. Reports of the deal have prompted the Securities and Exchange Commission (SEC) to re-examine its disclosure policies for private firms.
According to a 100-page document sent to investors, Facebook plans to cross the 500-investor threshold this year, possibly setting the stage for an initial public offering in 2012. Companies with more than 500 investors have to disclose some financial information to the SEC, though they are not required to become a publicly traded company.
The document also contains more detailed financial information on Facebook than was previously available. In the first nine months of last year the firm had revenue of $1.2 billion and net income of $355 million, according to a report from The Wall Street Journal.