Zynga, Facebook to Charge Employees to Sell Shares

Facebook and Zynga have both announced that they will charge employees substantial fees to sell their shares on secondary markets that have developed to buy stock in private companies. SharePost CEO Greg Brogger reports that Facebook will charge $2,500 for each transaction, while Bloomberg News reports that Zynga will charge $6,000. The fees are meant to cover high administrative costs (primarily around disclosure requirements) for the companies for these kinds of sales as well as to discourage employees from exercising options and selling shares before these companies go public.

The ease of selling shares on these secondary markets makes it more attractive for employees to exercise their options. If enough do that, the companies could become de facto public companies if they would have 500 or more shareholders and more than $10 million in assets and thus be subject to substantial reporting and disclosure requirements.