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Facebook Filing Initial Public Offering Wednesday

February 1, 2012

Facebook is taking its next step into the investment game by filing for an initial public offering on Wednesday morning.

The world’s largest social network has just 3,000 employees and a reported $4 billion in revenue.

Various media outlets say that Facebook is expected to submit paperwork to regulators on Wednesday for a $5 billion IPO.

The social network has selected Morgan Stanley and four other bookrunners to handle the initial public offering, according to a report by IFR.

The IPO is expected to be the largest to ever emerge from Silicon Valley, becoming another milestone in the eight-year-old company.

The four bookrunners chosen were Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan, according to the IFR report.

Final pricing for the IPO would not be set for several months, during which the size of the transition could be increased accordingly, depending on investors demand.

Zynga was the last dotcom company to debut, and it closed 5 percent below its IPO price during its first trading day in December.

Google currently holds the record for an Internet-focused company’s initial IPO debut with $1.9 billion.

Some experts believe Facebook could be valued between $75 billion and $100 billion once it starts trading.  However, no one can determine a for sure price until Facebook starts trading.

According to eMarketer estimates, Facebook made up 16.3 percent of the banners and graphical ads market last year.  This is compared to Yahoo’s 13.1 percent and Google’s 9.3 percent.

Martin Pyykkonen, analyst at Wedge Partners, told CNN that Facebook Credits now comprises of 10 percent of the company’s total revenue, which is up 5 percent from last year.  This revenue stream comes from the company’s proprietary payment system for purchases within apps and games.

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Source: RedOrbit Staff & Wire Reports



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