Social networking behemoth Facebook could be eyeing up the long awaited transition to a public company with an IPO that could amount to $10 billion.
On Monday the Wall Street Journal suggested that Facebook is looking to kick off the IPO between April and June of 2012. The deal could be based on Facebook having a market value of $100 billion.
Facebook has delayed the move to being a public company for much longer than is usually the case with at least some of that down to CEO Mark Zuckerberg’s reluctance to transform into such a company.
However with the increase in private investors set to exceed 500, the US financial regulatory authorities will then require Facebook to issue public financial results anyway. Such a drawback is undesirable without the massive fundraising opportunity of an IPO.
Zuckerberg had previously stated that an IPO would represent a reward to existing staff. A $10 billion pay day will, no doubt, be one hell of a reward for many of the Facebook staff. The promise of such an IPO in the future has played no small role in the ability of the company to poach some of the best and brightest staff from rivals such as Google.
For that reason it’s a case of when, not if, Facebook will make the move. However the Journal also noted that investors are increasingly cautious as to the real valuation of internet businesses.
Groupon, another internet business, saw stock fall 42 per cent following the $805 million IPO. LinkedIn, however, has done rather better.