Facebook Said to Plan IPO at $100B Valuation

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Facebook Said to Plan IPO at $100B Valuation

Facebook Inc. is considering raising about $10 billion in an initial public offering that would value the social-networking site at more than $100 billion, a person with knowledge of the matter said.

Facebook may file for an IPO before the end of the year, said the person, who asked not to be identified because the deliberations are private. Exact timing for the filing hasn’t been determined, the person said.

At $10 billion, the offering would raise more money than any other technology IPO, a sign investors are eager to get a piece of the top social-networking company. The amount would dwarf that of the previous record holder, Infineon Technologies AG, which generated $5.23 billion in its 1999 debut. Agere Systems Inc. raised $4.14 billion in 2000, putting it second.

Facebook’s $100 billion valuation would be twice as high as it was in January, when the company announced a $1.5 billion investment from Goldman Sachs Group Inc. (GS) and other backers at a worth of $50 billion. Facebook is currently pegged at $66.6 billion on SharesPost Inc., which handles trading of closely held companies.

Facebook expects to be required by U.S. regulators to disclose financial results by April 30, 2012, if it doesn’t go public by then, the company said in January. The social- networking company decided to wait until 2012 for its IPO to give Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, three people said last year.

Jonathan Thaw, a spokesman for Palo Alto, California-based Facebook, declined to comment. The Wall Street Journal reported earlier today that Facebook is discussing a $10 billion IPO with a valuation of more than $100 billion. The company aims to go public between April and June, the Journal said.

 

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Confirmed: Facebook Snaps Up Gowalla Team

http://www.pcmag.com/article2/0,2817,2397230,00.asp

 

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Facebook IPO is official: $38 per share, on sale tomorrow under ticker symbol 'FB'

It'll trade on the NASDAQ under the symbol "FB," with the outfit offering 180,000,000 shares of Class A common stock and selling stockholders offering 241,233,615 shares of Class A common stock. Closing of the offering is expected to occur on May 22nd, subject to "customary closing conditions."

 

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At $38 a share, the offering values the eight-year-old company at $104 billion, making its IPO the largest-ever stock market debut for an Internet company. It will raise more than $16 billion for Facebook and selling shareholders, including CEO Mark Zuckerberg, and ultimately could raise up to $18.4 billion, assuming underwriters exercise their option for "overallotments" to meet strong demand.

The IPO will leave Zuckerberg in control of the company, with more than 50 percent of the voting shares, and make him fabulously wealthy in the process, with a stake valued at some $19 billion.

Other early investors in Facebook also will make a killing. For example, Peter Thiel, the venture capitalist who sits on Facebook’s board of directors, invested $500,000 in the company back in 2004. He’s selling nearly 17 million of his shares in the IPO, which means he'll get some $640 million.

The sky-high valuation of Facebook puts it a bit ahead of Web veteran Amazon.com, which has more than 10 times Facebook's $3.7 billion in revenue. But Facebook is growing quickly and posted $1 billion in profits last year, more than Amazon's $631 million.

For individual investors, who will get their chance when Facebook begins trading Friday, investing in the company could be a risky bet, said Jay Ritter, an IPO expert and Cordell Professor of Finance at the University of Florida.

“My concern with Facebook is that at the valuation that public market investors are going to be buying in at there’s very little upside potential left,” he told CNBC.
But, he added, it doesn’t necessarily follow that Facebook is overvalued.

“The bullish case for Facebook is, as Google has demonstrated, targeted search can be an extremely profitable business, and Facebook has that franchise with social networks and it’s a very defensible business model,” Ritter said.

In a regulatory filing issued Wednesday, Facebook said it expects to sell as many as 421.2 million shares, up from a previous maximum of 337.4 million. The company is selling 180 million shares, raising an estimated $6.8 billion for general business use. The rest of the shares are being sold by early investors and company insiders who are cashing out.