Facebook (FB), is halting the trading of its shares on secondary markets by the beginning of April as it prepares for an initial public offering “IPO”.
Representatives of Facebook instructed firms that participate in trades of closely held companies to cease trading this week.
The move gives Facebook time to account for its shareholding base as it makes final preparations for an IPO.
Facebook, which filed in February to raise $5 billion in the largest-ever Internet IPO, is actively traded on secondary markets, including SharesPost Inc. and SecondMarket Inc.
A halt would end price fluctuations in private trading as Facebook confers with bankers and investors to determine an IPO valuation, as Bloomberg stated.
While the trading of startup shares lets early employees and investors make money from holdings, it has also come under regulatory scrutiny because the transactions can attract investors who may not understand the company and the risks involved.
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