Facebook flotation could raise $10bn and value Facebook at $100bn, say sources
Facebook may be heading for the largest initial public offering (IPO) by a technology or Internet company that would value the company at around $100 billion (£64bn), it has been reported.
Facebook’s offering would eclipse the 2004 $1.9 billion (£1.2bn) Google IPO, which valued the company at $23 billion (£15bn) and was the third highest value global Internet IPO.
Keep an eye on April
According to a Wall Street Journal (WSJ) report, the social networking giant, recently plagued by privacy issues, is said to be considering an IPO and may go public between April and June 2012, with a possible filing by the end of this year.
Despite the strong likelihood of the deal, the company has not been willing to confirm whether or when it would even make an IPO. “We’re not going to participate in speculation about an IPO,” Facebook spokesman Larry Yu told WSJ.
In fact, CEO, Mark Zuckerberg, who owns an estimated 24 percent of the business, chose to stay private as long as possible, expressing a reluctance in the past to do an IPO, according to reports. And while he has not made any final decision, sources close to the matter have said that the company is “In internal discussions over the timing of its filing with the Securities and Exchange Commission, and is considering filing dates as early as this year.”
The company, which until now has kept its speculated $4 billion in revenue private, will soon be required, by securities exchange regulations, to make its financial information public when it crosses the 500-shareholder mark.
According to the report, Facebook CFO, David Ebersman, has been in talks with Silicon Valley bankers about an IPO, although the company does not seem particularly interested in using any of them, and has even crafted its own prospectus, to be filed with the SEC.
Ebersman is said to doubt the benefit investment banks would have in a Facebook IPO, since the company is so highly sought after by major investors, according to people familiar with the matter.
The possibility still exists that Facebook will publish its results without an IPO, says WSJ, but sources reveal that board members and top executives feel this would “leave the company at a disadvantage, since they would have most of the liability that comes with being a public company, but lose out on the fundraising benefits of a public offering, said these people.”
Facebook, which makes its money of advertising, now has more than 800 million users registered on the site with approximately 500 million logging in every day.