June 14, 2011

Facebook IPO By Early 2012

Valuation Could Exceed $100 Billion

Facebook is preparing to file for an initial public offering by the first quarter of 2012 at a valuation that could exceed $100 billion, CNBC reported on Monday.

Facebook CEO Mark Zuckerberg has long maintained he is in no rush to take his company public, but he may be forced to do so by Securities and Exchange Commission (SEC) regulations that require companies with more than 500 private investors to disclose financial information, CNBC said.

Citing "people familiar with the matter," the financial network said Facebook will likely report that it has met that threshold by the end of the year.

The SEC's "500 rule" requires private companies to release quarterly financial reports similar to those released by public companies.

Additionally, Facebook is under pressure from workers who are not permitted to sell their shares on private exchanges, where the company's valuation has already reached as high as $85 billion, CNBC said. 

This restriction on employees may be prompting some workers to quit Facebook in order to be able to monetize their shares, according to CNBC.

The news coincides with a report released Sunday that said the popular social networking site had lost 6 million U.S.-based users last month, from 155.2 million to 149.4 million "“ a drop of 3.7 percent.

"Facebook appears to have had fewer monthly active users at the start of June than at the start of May in the U.S. and a few other countries "” at least according to one data source "” even as it has grown bigger than ever worldwide," said Inside Facebook, the research firm that released the report.

Facebook has disputed the figures, but if they are accurate it would be the first time the company has lost users during the past year, Inside Facebook said.


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