Facebook is reportedly planning an initial public offering next year that will value the social network at more than $100bn.
According to a report in the Wall Street Journal, Facebook’s chief financial officer David Ebersman has discussed the float with Silicon Valley bankers, with April 2012 slated as a possible date to go public.
Sources told the WSJ that CEO Mark Zuckerberg has not confirmed the terms of the deal yet.
According to the WSJ, 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.
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.
This would make Mark Zuckerberg worth around $24bn, placing him behind Microsoft’s Bill Gates and Oracle’s Larry Ellison, but ahead of Google co-founders Larry Page and Sergey Brin, according to estimates of their wealth.
Zuckerberg has been reluctant to comment on the impending float. Speaking to American network PBS earlier in the month he said: “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,” he said.
“Now, the promise isn’t that we’re going to do it on any kind of short-term time horizon. The promise is that we’re going to build this company so that it’s great over the long term, right. And that we’re always making these decisions for the long term, but at some point we’ll do that.”
Following seven years of rapid expansion Facebook 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.
