Mark Zuckerberg at Facebook headquarters, April 2011
As the 2011 calendar year winds down, Facebook is said to now be making concrete steps toward its planned initial public offering.
On Monday afternoon the Wall Street Journal published a report stating that Facebook plans to publicly list its shares on the stock market in spring 2012, specifically looking at “dates between April 2012 and June 2012.” Facebook’s CFO David Ebersman is currently in talks with investment banks angling to underwrite the IPO, but the company has not entered into any mandates yet, according to the WSJ. The IPO will reportedly value the company at more than $100 billion.
Are you surprised? You shouldn’t be. This is all in line with a number of previous reports that the social networking company’s IPO could occur around the time this coming spring when it will be forced to publicly disclose detailed financial information anyway. As we wrote this past summer:
Facebook has said it expects to have more than 500 private shareholders by the end of the 2011 calendar year. Once a private company with more than $10 million in assets exceeds 500 investors, it is required to begin filing financial reports with the Securities and Exchange Commission, much like public companies are required to do. Under this regulation, known as the 500 investor rule, Facebook will likely be forced to begin filing financial reports with the SEC by April 30, 2012.
Meanwhile, Facebook’s top brass has not been shy about the company’s plan to eventually hold an IPO. In an interview earlier this month on the television program Charlie Rose, Facebook founder Mark Zuckerberg said an IPO would serve as a reward to his employees. He also acknowledged that a liquidity event — typically either an IPO or a sale — is a trade-off that companies make when they take on venture capital:
You know, we’ve made this implicit promise to our investors and to our employees that by compensating them with equity and by giving them equity, that at some point we’re going to make that equity worth something publicly and liquidly, in a liquid way.
That’s why, as much as people may worry about what Facebook will become once it’s under the microscope of public market investors, a big IPO like the one it is said to be planning is practically a given for a company that has raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, I still say that it’s in the realm of possibility that Microsoft could make Facebook an offer it can’t refuse; but chances are, the Facebook IPO buzz will become a reality at some point soon.
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Facebook IPO: It’s a matter of when, not if: Mark Zuckerberg at Facebook headquarters, April 2011As the 2011 cal… http://t.co/tYK8GJOh
Facebook IPO: It’s a matter of when, not if: Mark Zuckerberg at Facebook headquarters, April 2011As the 2011 cal… http://t.co/3KQxGMBw
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Facebook IPO: It’s a matter of when, not if: Mark Zuckerberg at Facebook headquarters, April 2011As the 2011 cal… http://t.co/VMsbO5Cd
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RT @louiebaur: Facebook IPO: It’s a matter of when, not if http://t.co/tDEQq5GO
Anyone think MSFT could still make an offer Facebook can’t refuse: “Facebook IPO: It’s a matter of when, not if” http://t.co/lcS9s4K6
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RT @louiebaur: Facebook IPO: It’s a matter of when, not if http://t.co/tDEQq5GO
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RT @gigaom: Facebook IPO: It’s a matter of when, not if http://t.co/dbtplncE
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RT @GigaOm: Facebook IPO: It’s a matter of when, not if http://t.co/ixeW1BfB
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RT @gigaom: Facebook IPO: It’s a matter of when, not if http://t.co/Z7NxgQxn
will hit 34 act requirement to register w 300+ shareholders “@gigaom: Facebook IPO: It’s a matter of when, not if http://t.co/d8wXNQhH”
RT @louiebaur: Facebook IPO: It’s a matter of when, not if http://t.co/tDEQq5GO
RT @louiebaur: Facebook IPO: It’s a matter of when, not if http://t.co/tDEQq5GO
Facebook IPO: It’s a matter of when, not if: Mark Zuckerberg at Facebook headquarters, April… http://t.co/jxDhD14x
Facebook, according to recent stories in the press is going to go public in the next few months. This must happen for two reason. One, the company now has, or very soon will have, more than 500 shareholders. Two, people have to get paid.
Mark Zuckerberg is a realistic man, and he has with the help of some very smart people raised over two billion dollars to keep the lights on while Facebook learned how to make money.
Over the last few years I have watched and learned about Facebook. Over the last twenty I have seen how the rise of our digital culture and social media has very much changed the very fabric of society. Columnists have even posited that Facebook could, in very fundamental ways, actually become the Internet. Become the gateway by which the majority of users actually reach the content there on the Internet. AOL once was the gateway for a large percentage of users, and I think there are telling parallels.
I think Facebook, or at least Mark Zuckerberg, has realized that this is the top. The peak of value that Facebook will ever have, and that it is probably on the decline.
Billions is a lot of money, and Zuckerberg will be one of the richest men in the world when all is said and done. He is a visionary and had some very keen insights on how social media would change the world. However I don’t think visionary management is something that publicly traded companies are known for. Zuckerberg, by many popular reports is also not known for his ability to compromise, or his skills as a diplomat.
He might be the one of the greatest minds of his generation, and he might surprise us just as Jeff Bezos at Amazon has done and continues to do. My money is on the other possibility.
MySpace was very successful, Friendster was less so, and not so long ago Facebook was a distant third. Google+ seems to be accelerating. Twitter is still relevant. Foursquare is still relevant, though less so than many others. LinkedIn does a much better job of professional networking in my opinion, but the interface is horrid. There are hundreds of other examples, the marketplace is fragmenting just like Browsers did.
Facebook is starting to become ponderous. One or two huge PR blunders, like Netflix or Google has had, and the fortunes (and value) of Facebook might change significantly. Also, tomorrow someone might introduce something better.
The next few months will be very interesting and when the IPO comes I hope that investors are wary.
Thanks for the very thoughtful comment, Ross.
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Will you be buying facebook stock if it goes public? http://t.co/2phOcnYX
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I always have a tough time taking a position on Facebook. It’s impossible to argue with the sheer size of the network, and the fact that it has become such a central and fundamental part of the way we connect and communicate. That said, the rise of the mobile web creates opportunities for compelling niche networks that do small things better than Facebook can. (e.g. pinterest for photo sharing). We’ll see if Facebook can continue their agile responses to Google+ when decision makers have to look out for shareholder interests as a primary driver for decision making.
Good points there, Nick. The presence of public shareholders will almost certainly have an impact of some kind on how the company’s product development works; it’ll be very interesting to see what happens post-IPO. Thanks for weighing in.
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RT @Alltop_Social: Facebook IPO: It’s a matter of when, not if http://t.co/B6ZEPjDT Social-Media.alltop
페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
RT @mushman1970: 페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
RT @mushman1970: 페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
RT @mushman1970: 페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
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RT @mushman1970: 페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
RT @mushman1970: 페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
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RT @REBNY: Facebook reportedly works toward $10 billion IPO http://t.co/OdUWFUUb
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Reading: Facebook IPO: It’s a matter of when, not if http://t.co/NleEzaDN
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I have three issues with Facebook doing an IPO. The first is that tech stocks, especially social ones, are extremely volatile as it takes one wrong move for the consumer base to disappear. Ask AOL, Compuserve, and many others how insanely popular they were only to stand as a memorial to the ever-changing technology/social media market. My second problem is that the economy has not shown a sustainability that would encourage the kind of investment in Facebook’s stock that their executives seem to think that they will get. Oh, I’m sure that there first month or first quarter will be sensational as people ride the first wave. But the trends have always shown that these types of tech stocks are for relatively instant cash grab scenarios. I make a short-term investment in the first days…ride the wave up…sell high and then watch the stock fall as I live off the latest addition to my nest egg. My third issue is how Facebook will make money after the FTC ruling to make it opt-in. No longer do you have the instant revenue streams from millions of people who are constantly clicking and refreshing. I think this will really effect their business model and their financial viability in the long term. I would categorize Facebook’s stock as a classic “Buyer Beware” scenario. I’m sure everyone will be pumping the stock for the first bit, because it seems like an inevitable money maker. But AOL and Compuserve were considered “can’t miss” as well, and look where that got them.
RT @mushman1970: 페이스북이 내년 봄에 1,000억달러(약 110조원) 가치의 기업공개를 할 예정이라는 소문. 현재 애플 3,500억달러, 구글은 2,000억달러 수준. #wgl http://t.co/nncejoox) http://t.co/ebbPKt0m
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RT @louiebaur: Facebook IPO: It’s a matter of when, not if http://t.co/tDEQq5GO
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RT @louiebaur: Facebook IPO: It’s a matter of when, not if http://t.co/tDEQq5GO
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