initial public offerings (IPOs) trading on American exchanges

Monday, November 28, 2011

Facebook Plans IPO Between April and June

Facebook is looking to go public between April and June 2012 with a valuation of over $100 billion, the Wall Street Journal reported, citing people familiar with the matter.

  • Hoping to raise $10 billion
  • Biggest tech IPO ever
Facebook is exploring raising $10 billion, the Wall Street Journal said on Monday. It hopes the offering will value the company at more than $100 billion, according to WSJ, which first reported the story.

Facebook's Chief Financial Officer, David Ebersman, had discussed a public float with Silicon Valley bankers but founder and Chief Executive Officer Mark Zuckerberg had not decided on any terms and his plans could change, the Journal said.

The social network, which now claims more than 800 million members after seven years of explosive growth, has not selected bankers to manage what would be a very closely watched IPO. But it had drafted an internal prospectus and was ready at any moment to pull the IPO trigger, the Journal cited people familiar with the matter as saying.
Facebook chief executive officer and Founder Mark Zuckerberg

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. Facebook decided to wait until 2012 for its IPO to give Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, people familiar with the matter said last year.

Google’s IPO
Google Inc. (GOOG), one of Facebook’s chief rivals in the Internet advertising market, raised $1.67 billion in its IPO in 2004. It is now valued at $188.7 billion.
Facebook’s revenue will more than double to $4.27 billion this year from $2 billion in 2010, research firm EMarketer Inc. said in September.

At $100 billion, Facebook would be worth 23 times that projected revenue, signaling the company expects its faster growth rate to justify a premium valuation over rivals. Mountain View, California-based Google trades at 6.4 times projected current-year revenue. Apple Inc. is worth 2.5 times sales, while the multiple for Microsoft Corp. is 2.8.

The valuation Facebook is said to be seeking would place it (SPX) near PepsiCo Inc., which is worth $99.5 billion, and Verizon Communications Inc., at $103.7 billion. Apple is the world’s most valuable technology company, at $346.9 billion.

Facebook’s valuation is currently pegged at $66.6 billion by SharesPost Inc., which handles trading of closely held companies. The Wall Street Journal reported yesterday that Facebook was considering the $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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