Facebook To List Shares With Nasdaq, But IPO Could Be Delayed

In preparation for its forthcoming IPO, Facebook will be listing its shares on the Nasdaq Stock Market, the waiting period for entry into one of the best known stock indexes factored in as a negotiating point when Facebook was considering its options, Bloomberg reports.

According to a person with direct knowledge on the matter said that Facebook had decided to list on the second-biggest U.S. stock exchange back in April 5th. Eight days later, Nasdaq shortened the time a company must be listed on a ‘recognised market’ before becoming eligible for the Nasdaq-100.

Before the rule change, it used to be at least two years before a company could be made eligible, or one if a stock would be among the top 25 shares in the index by market value. Now this ’seasoning period’ has been reduced from at least one year to three months. Facebook had confirmed this week that it would be listing on Nasdaq instead of the New York Stock Exchange, the same time the rule change was implemented. The change also applied to the Nasdaq Financial-100 Index and Nasdaq Biotechnology Index.

Facebook’s IPO is expected to happen in May, but Venturebeat is saying that, after analysing the major stocks over the past month, there’s a very real possibility that this will be delayed. It cites that the majority of tech stocks have experienced a 15-30 per cent drop over the last month, coinciding with the major markets experiencing a drop in stock prices too. The consensus is that unless there’s recently IPO’d stocks in the tech sector rise drastically very soon, the chances of seeing a Facebook IPO in May is very slim.

To be honest, although having the IPO happening sooner would mean more revenue coming in for the rest of the year – a drop in profits for Q1 2012 could suggest that it might lean towards this approach – it could potentially do more harm than good if it launches during what’s a turbulent period. The massive hype that has surrounded Facebook’s IPO since was first announced could give them an immediate boost in revenue, but that may be short lived if the markets continue to decline.