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back to article Facebook looks for more credit with the banks

Facebook is planning to add a few extra bucks to its $2.5bn credit line to help cover the major tax bill for employee stocks when it goes public. The social network, which already upped its credit just six months ago, is taking more cash while it can get it, sources told Reuters. Facebook has said that it will foot the tax bill …

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(Off-topic)

This new layout for the comments is poor. I don't know to whom one needs to complain about it, but please go back to the previous layout, instead of this "wider-columns" one, that incorporates the currently very fashionable "let's see how homogenous we can make the disparate elements of the page seem' so that, for example, all the posts kind of run into one another instead of being instantly recognized as discrete elements.

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jai
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Re: (Off-topic)

i read the site using the mobile formatted version and the new comments formats look great on m.forums.theregister.co.uk

please don't change them back to the horrible old style!

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Mushroom

And they go bust when???

I look forward to the day it happens

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Yag
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Facepalm

... what?

Hey banks! as we will raise a crapload of money with our IPO, leading to a crapload of money for nothing for our "employees" (read - top management), we need additionnal crapload of money to pay for our "employees" taxes...

http://i0.kym-cdn.com/photos/images/original/000/126/314/3cd8a33a.png needs to become an ElReg icon those days...

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WTF?

I don't really understand the tax laws

Espescially in the USA but If I have a benefit (like my company car) I get taxed on the value of that "perk" (despite it being essential to me performing my work both 9-5 and out of hours!)

So if my employer suddenly compensated me to the value of whatever I pay in tax then doesnt that become a taxable benefit in itself (or is it different when you are talking Mega Bucks?)

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YAY!!!!!!

Obviously taking lessons from Kent..

http://www.phorm.com/assets/reports/Director_Dealing_27-Dec-2011.pdf

28 December 2011

Phorm, Inc. ("Phorm" or the "Company")

Director Dealing

Phorm (AIM: PHRM and PHRX) announces that on December 28th Kent Ertugrul, CEO and Chairman of the Company, transferred for nil consideration 2,594,412 shares in the Company to Value Trust Holdings Pte Ltd limited for tax planning purposes.

Well done 'that man'. Good to see you taking care of 'business'.

urrrrm whorrrp etc...

Presumably Apple has a patent on such activities. Narf Narf.

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Is this an example of when the State (Federal AND Calif) governments reap...

LOL "The title is too long." So THAT's where some of the recovered chars came from....

Original title

"Is this an example of when the State (Federal AND Calif) governments reap a windfal for little input?"

Don't misunderstand, but I feel that paying "reasonable" taxes is a fair demand than paying into something that extracts far more than the work it puts in.

For example, if a company generates a product or service, it might already know it is to pay an effective 45% tax on profits. But, it is most likely limited on how much it can write down, deduct, and so on. So, in the case of a fb, having earned or raised tons of money suddenly becomes a taxable event 'just because' a transaction took place.

But, for fb to help its "staff" (all employees?) who have those RSUs cover their taxes means (I suppose) fb is using the staff's taxes as another way to increase its upfront cash outlays or write-down costs. Maybe, though, the IRS could get painful and just go after the employees anyway, claiming they received a taxable benefit by virtue of fb relieving them of paying a tax that is over $400 or $600 (or whatever the current amount is).

As for the banks, unless they have hands reaching deep into prospective fortunes of fb, other than having good face time and future relations with fb, why would they want to lend fb hundreds of millions to cover taxes which will be in the billions? Of course, they surely don't expect fb to implode or become the next GoDaddy or Yahoo! or friendster in the next 2 years, so some banking official at each bank will stand to reap a huge bonus if fb's loan generates a huge quarterly and annual interest rate income stream... Hmm, maybe I answered my own question....

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