January 17, 2012
Facebook IPO Set For Late May, Valued At $100 Billion
Facebook's long-awaited initial public offering (IPO) will likely take place during the third week of May, AllThingsD reported on Monday, citing multiple sources.
If so, that would mean the social networking company would be required to file documents with the Securities and Exchange Commission (SEC) within the next month, due to the agency´s three to four month review process.Although Facebook has never publicly commented on its plans to take the company public, its executives reportedly held internal discussions late last year over when to file the documents, and were targeting an IPO date of between April and June.
The Facebook IPO is expected to be one of the largest tech offerings to date, with estimates predicting the company will raise $10 billion on a $100 billion valuation.
Those figures presumably reflect Facebook´s vast user base of 800 million members, which is expected to reach 1 billion by the end of the year. Facebook´s revenue, which was reportedly close to $4 billion in 2011, is expected to grow more than 30 percent in 2012.
The company´s stratospheric valuation — which exceed those of tech bellwethers such as Amazon ($81 billion), Cisco ($96 billion) and HP ($52 billion) — means Facebook´s IPO will likely face fierce scrutiny from regulators.
However, the company may not actually have much of a choice about whether it wants to go public, due to a provision in the 1934 Securities and Exchange Act requiring private companies to release quarterly financial data once they reach 500 or more owners. Facebook is expected to surpass that milestone sometime this year.
The New York Times reported earlier this month that Facebook had signed a deal with investment bank Goldman Sachs for half a billion dollars, saying it "expected to pass 500 shareholders at some point in 2011, and therefore expects to start filing public financial reports no later than April 30, 2012.”
Speculation about a potential Facebook IPO began in 2009, when the company changed its stock structure to make a public filing easier. However, those rumors were put to rest by various media reports that said the company would not consider going public until 2012 at the earliest.
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