Facebook Stock Maneuver Feeds IPO Rumors

Consider yourself forewarned: the official line is that "Facebook has no plans to go public at this time."  Just the same, a financial maneuver the company's performing has raised a few eyebrows since it seems to point towards that possibility.

Jessica E. Vascellaro reported this afternoon, "The company is in the process of converting all current shareholders to Class B stock, which carries ten times the voting power of Class A stock . . . .  Those shares will remain Class B shares unless the owner sells them during an initial public offering, at which time they will become Class A shares . . ."

This sort of exercise helps ensure that existing stockholders retain control of a company regardless of what happens on an open market.  In Facebook's case, Mark Zuckerberg, who owns many, many shares, would benefit most.  (Important note: It's not necessarily an "evil" move, though, as Google did the same sort of thing for the sake of Sergey Brin, Larry Page, and Eric Schmidt.)

So what we have here is one more piece of evidence (remember the preexisting enthusiasm surrounding its stock?) that Facebook could be headed towards an IPO.

Even if Facebook doesn't have definite plans to go public, the recession at least hasn't completely scared the company away from the idea, then.

Have You Read This?

> (Private) Facebook Shares Up 42% In Four Months

> Facebook Catapults Into Third Place Among Video Sites

> Facebook Most Widely Used Network Among Businesses

Yahoo Exchanges Alibaba.com Stake For $150M

Yahoo should soon have about $150 million more to its name.  By selling 57.48 million shares, the Sunnyvale-based company is liquidating its stake in Chinese business-to-business site Alibaba.com and collecting a tidy profit.

Yahoo acquired its 1.14 percent stake in Alibaba.com during the company's initial public offering in 2007.  Now, Reuters reports that Yahoo will sell the stake at a 4.0-6.4 percent discount on Alibaba's most recent closing price.

That might indicate that Yahoo's in a bit of a hurry; there's a definite concern, at least, about how both Yahoo and Alibaba.com shareholders will interpret its move.  (A relevant note: Yahoo's stock is already down 1.22 percent this morning).  But even after the discount, Yahoo should realize a profit of 47 percent or more, which makes its investment look like a good one.

Here's another important detail: Yahoo is holding onto its 40 percent stake in Alibaba.com's parent company, Alibaba Group, so it's not getting out of China or anything of the sort.

John Spelich, a vice president at Alibaba Group, also stated, "We are pleased to learn of the Yahoo! decision because having broader ownership of Alibaba.com with increased liquidity and support among institutional investors is what Alibaba.com hoped to achieve when it released the cornerstone investors."