Initial Public Offerings
Facebook Files Registration Statement
As I’m sure you’ve heard, Facebook filed its registration statement today. The social networking giant is looking to raise $5 billion in a public stock sale that could occur this spring. Depending on demand from potential shareholders, the company could be valued at anywhere from $75 billion to more than $100 billion. The float (the publicly traded equity) of 5%, if the valuation ends up near the $100 billion mark, is unusually low for an IPO, and suggests that Facebook went public at least in part because it was hitting the 500 shareholder mark that increases regulatory requirements regardless of a company’s public or private status. Also, the company already has nearly $4 billion in cash.
Insider Trading
Bill to Stop Congress from Investing on Insider Information Advances Through Congress
Under current laws members of congress can use non-public information gained from their public offices to make strategic investments. If private citizens did this they would face jail time. Lawmakers from both parties have issued public support for the Stop Trading on Congressional Knowledge Act (the STOCK Act), which would make it illegal for lawmakers to invest on the basis of non-public information. The STOCK Act easily cleared a procedural hurdle in the Senate this week on a 93-2 vote.
As the Congressional Research Service summary explains: the STOCK Act “Amends the Securities Exchange Act of 1934 and the Commodity Exchange Act to direct both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to prohibit purchase or sale of either securities, security-based swaps, or commodities for future delivery or swap by a person in possession of material nonpublic information regarding pending or prospective legislative action if the information was obtained: (1) knowingly from a Member or employee of Congress, (2) by reason of being a Member or employee of Congress, or (3) from other federal employees and derived from their federal employment.”
Technology Contracts – Privacy Policies
Google Makes Waves by Amending Its Privacy Policies
Google announced last week that it was creating a single privacy policy for all of its services. Currently, Google has at least 60 different privacy policies. Google is emphasizing that the new comprehensive policy will be more user friendly as the document will be more readable and 85% shorter. Some federal lawmakers have expressed concerns that users aren’t able to opt out of the data policy. Google responded to these concerns in an 11 page letter to Congress that noted “users private information remains private,” and that they are not selling user data, or collecting any additional data under the new policy. And, of course, if users really object to the terms of the privacy policy, they can always opt out by not using Google products at all.
Corporate Finance
Keiretsu Forum Northwest Provided $24 Million in Capital in 2011
The Keiretsu Forum Northwest, a network of angel investors, invested $24 million in 36 different companies during 2011. The fundings ranged from $250,000 to $3 million. The $24 million invested in 2011 is the most invested in any year by the forum since it was established in 2005. The biggest sectors for investment by the forum were real estate firms, and tech companies.
Small Business Lending up 20% in December 2011
According to the Thomson Reuters/PayNet Small Business Lending Index borrowing by US small businesses was at a four year high in December of 2011. In other positive news, the same PayNet report indicates that accounts in severe delinquency fell to a record low.
