Facebook Said to Plan to Start Reporting Financial Results by April 2012
Facebook Is Said to Plan to Start Reporting Finances
Noah Berger/Bloomberg
Facebook Inc. plans to start reporting its financial results by April 2012.
Facebook Inc. plans to start reporting its financial results by April 2012. Photographer: Noah Berger/Bloomberg
Jan. 6 (Bloomberg) -- Alan Patricof, founder and managing director of Greycroft Partners LP, discusses Goldman Sachs Group Inc.'s $450 million investment in Facebook Inc. Patricof speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Jan. 6 (Bloomberg) -- Bloomberg's Christine Harper discusses a Goldman Sachs Group Inc. one-page investment profile sent to private wealth clients, that said Wall Street’s most profitable securities firm could unload its own holdings in Facebook Inc. without letting them know. The document stated “GS Group may at any time further reduce its exposure to its investment in Facebook (through hedging arrangements, sales or otherwise), without notice to the fund or investors in the fund.” Harper speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Jan. 6 (Bloomberg) -- Rob Glaser, chairman of RealNetworks Inc., talks about his company's cloud-computing technology, convergence in the media industry and his technology investments. Glaser, speaking with Cory Johnson and Carol Massar at the Consumer Electronics Show in Las Vegas on Bloomberg Television's "Street Smart," also discusses the outlook for Facebook Inc. (Source: Bloomberg)
Facebook Inc. plans to start reporting its financial results by April 2012, even if it hasn’t held an initial public offering, according to a document sent to prospective investors.
The company would be forced to make the disclosures because it expects to have 500 or more shareholders by the end of this year, a threshold that makes reporting results necessary under U.S. Securities and Exchange Commission rules, said a person who reviewed the document. The person declined to be identified because the matter hasn’t been made public.
Facebook, the top social-networking site, is gaining attention from investors because of its surging user numbers and advertising revenue. Goldman Sachs Group Inc. and funds managed by the firm have invested $450 million in Facebook, according to an offering document sent to investors. Goldman Sachs also has an arrangement to let clients make additional investments totaling as much as $1.5 billion.
Facebook, once expected to go public this year, plans to push that off until 2012, people with knowledge of the company said last year. Larry Yu, a spokesman for Palo Alto, California- based Facebook, and Stephen Cohen, a Goldman Sachs spokesman in New York, declined to comment.
Facebook released some sales and profit information as part of the document sent to Goldman Sachs clients. The company had $1.2 billion in revenue and $355 million in profit during the first nine months of 2010, according to the person. That compares with sales of $777 million and profit of more than $200 million in all of 2009.
Advertising Growth
Much of the money is generated by ads. Facebook took about 9.4 percent of the display-advertising market in the U.S. last year, up from 6.6 percent in 2009, according to estimates from EMarketer Inc. in New York. Yahoo! Inc., which leads the market, grabbed about 16.2 percent, down from 16.5 percent. Google Inc., which is stronger in search ads, had 6.7 percent, up from 4.7 percent, EMarketer projects.
The offering document also showed that $75 million of the $450 million investment is coming from Goldman Sachs Investment Partners, a hedge fund that handles client money. The firm’s own $375 million investment will probably be cut to $300 million because Goldman Sachs expects to sell $75 million to third parties or to the fund it created so clients could buy a stake in Facebook.
The investment, which accompanied a $50 million infusion from Russia’s Digital Sky Technologies, valued Facebook at $50 billion, according to people familiar with the matter.
The Wall Street Journal and the New York Times previously reported on portions of the investor document.
To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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