Sources say that Facebook and Zynga are applying fees of at least $2,500 for each sale of company shares. According to legal experts, this move is designed to discourage employees from giving away company equity prior to an initial public offering.
“The fee is being imposed for the administrative burden of providing the information that the seller by law is required to provide, and making sure the company is not screwing up its 500 shareholder count,” said Ted Hollifield, a partner at Dorsey & Whitney.
“Zynga in particular began imposing a fee of $4,500 for each private share transaction in August, raising the fee to $6,000 per sale in September. The $6,000 fee sounds exorbitant if you’re looking at purely administrative costs,” said Hollifield. “If you’re looking at it in the context of potential compliance with reporting obligations, then the $6,000 fee is actually reasonable.”
Source: Bloomberg
