SEC Eyes Facebook and Twitter Private Share Trades

By Robert Davis
Dec 29 2010

The Securities and Exchange Commission announced today that they are looking at the US-based trades of private stocks at such companies as Facebook and Twitter.

The SEC has said that they are interested in the number of shares that have been traded among several different Silicon Valley companies. Because these are private firms, the stock numbers are not public domains. Therefore, only an investigation by the SEC can prompt the companies to reveal stock figures.

However, Facebook has said that they are considering an IPO in the very near future. This is linked to the investigation, some insiders have suggested, as the timing is there for Facebook to go public.

Both Facebook and Twitter are currently under investigation. According to the investigation, there are some issues over the trades that have not been resolved, mostly to do with the actual share prices as well as the number of shares that were traded.

Facebook officials have said that they were simply selling some shares to raise additional capital for new upgrades to the company’s servers. But the SEC has found similar discrepancies at Twitter and other Silicon Valley companies.

An IPO from Facebook is considered the stock sale of the century. However, Mark Zuckerberg has been said to be leery of an IPO because it would make his company more vulnerable to takeover attempts by larger companies.

Facebook is expected to file the necessary paperwork with the SEC for the stock options within the next month.