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Facebook IPO 100BN

November 29, 2011 by staff 

Facebook IPO 100BN, Facebook is the source of another bout of flotation speculation following a report from the Wall Street Journal (WSJ) that suggested that the world’s largest social network is prepping for an IPO in spring 2012.

According to sources, the public stock offering could raise up to $10bn, which would value the company at around $100bn, making in one of the largest IPOs in history.

Following seven years of rapid expansion the social network now boasts more than 800 million users. The exact timing of the flotation hasn’t been decided, according to sources at WSJ, but the speculation is that it will depend on the condition of the markets.

Groupon’s recent disastrous public offering will no doubt be playing heavily on Facebook co-founder and CEO Mark Zuckerberg’s mind when he considers the timing.

The much anticipated Groupon flotation has not fared well, with stocks in the online coupon company plummeting not long after its IPO. Groupon shares fell 9 per cent to close at $15.24 just three weeks after the stock began trading on 4 November, when it opened at $28.

It is unclear whether Facebook has chosen to go public, or whether it in fact might be forced into floating: as it might exceed the limit of 500 stockholders allowed for private companies by US regulation. If Facebook goes over 500 shareholders, it will be forced into a formal S-1 filing, as happened to Google in 2004.

The Securities and Exchange Commission (SEC) says that “a company must file financial and other information with the SEC 120 days after the close of the year in which the company reaches $10m in assets and/or 500 shareholders, including people with stock options”.

The company announced back at the start of 2011 that it will exceed the 500 shareholders limit.

If Facebook were to secure the $100 valuation it would rank it ahead of Cisco, Amazon and Disney, though behind Intel and at about half the value of Microsoft and Google.

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