In the news this week, Facebook will begin allowing their employees to sell their vested shares. This represents an early liquidity event for the employees of the social networking company. Facebook’s common shares are valued internally at $4 billion. Some of you will remember that Microsoft valued Facebook at $15 billion last year, but in that deal, Microsoft purchased preferred shares in the company which come with additional rights.
In light of my recent post about the perils of early exercising stock options, this is an interesting new development in employee compensation. In the past, only early employees with substantial stock ownership in a startup have been in a position to negotiate the sale of their shares pre-IPO. This is a great opportunity for Facebook’s employees to get some of their money out of the company now. And with new user signup rates falling, who knows when or if the company will ever have an IPO?
If you want to learn more about this program, read the BusinessWeek and VentureBeat articles. Also, Silicon Valley Insider goes through the numbers.
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