Facebook hasn't gone public yet, but investors have been trading the social network's shares for years. That may soon change.
Facebook has instructed secondary-market organizations, like SharesPost and SecondMarket, to stop trading its shares this week, Bloomberg reports. The move is designed to help Facebook determine who its shareholders are and to establish a proper valuation leading up to its initial public offering, Bloomberg's sources said.
Facebook filed for its IPO in February. The company hopes to raise $5 billion in the offering on a valuation that could soar past $100 billion. If that happens, it would make Facebook one of the most valuable companies in the world, leaving only tech giants like Apple and Google ahead of it.
Although Facebook is reportedly turning its back on the secondary market now, in the past the company has used it as a way to reward employees and investors. In 2010, for example, the company initiated a 5-to-1 stock split, following similarly major splits in prior years. Those moves, plus Facebook's soaring success, have prompted many shareholders to cash out prior to the IPO. All those that will still hold stock after Facebook bans further trading will need to wait for the IPO to cash out.
Facebook trading on the secondary market became such a hot practice that in 2010, the Securities and Exchange Commission was rumored to be investigating the social network to see just how many investors it had. If the SEC ever did investigate Facebook, the inquiry never went anywhere.
Facebook did not immediately respond to CNET's request for comment on the Bloomberg report.