Facebook announced Tuesday that it was creating two classes of stocks for itself and converting all existing stock into so-called Class B shares with 10 voting units per share. Class A shares which could be sold at an initial public offering would represent 1 vote per share.
“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,” a Facebook spokesman, Larry Yu, said in an e-mailed statement. “This revision to the stock structure should not be construed as a signal the company is planning to go public.”
What this does is allows the company, via a public offering, to raise cash by selling the Class A shares on the open market while retaining a firm grip on things with it's Class B shares. While they may be denying that an IPO is in the works the signs are pointing in that direction.
Source: New York Times
“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,” a Facebook spokesman, Larry Yu, said in an e-mailed statement. “This revision to the stock structure should not be construed as a signal the company is planning to go public.”
What this does is allows the company, via a public offering, to raise cash by selling the Class A shares on the open market while retaining a firm grip on things with it's Class B shares. While they may be denying that an IPO is in the works the signs are pointing in that direction.
Source: New York Times
