An interesting piece of news from Fortune suggests that why the Facebook’s initial public offering (IPO) timing is important while considering from tax perspective point. The publication states that if the company begins trading on Friday, as planned, means it would be 228 days away from 2012 end or in tax terms, 228 days before capital gains tax rates are expected to rise.
In an IPO, certain shares are “locked up”, means that they cannot be sold immediately resulting in investors have to wait to unload their stake. The point here is that as the vast majority of these expire 181 days after Facebook goes public which will expire on November 15. “I don’t care if the IPO in May or June, so long as it isn’t in July,” said one current Facebook investor, who bought shares on the secondary market from company employees.
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- After IPO, Will Facebook Lose Its Shine?