Facebook Inc. has filed paperwork with regulators for inclusion on a US stock exchange. The online social network did not list an exchange but did file for the ticker “FB”.
In the filing, Facebook said it hopes to raise $5 billion; however, some analysts say that figure is more likely $100 billion. It will take months before the final figure is set.
Facebook’s value will be determined by its ability to attract advertisers and handle privacy concerns.
Facebook is expected to make the largest technology IPO debut in US history, surpassing both Google and Netscape, which previously held the title. Bookrunners Morgan Stanley, JP Morgan, America Merrill Lynch, Goldman Sachs and Barclays Capital handled the IPO prospectus.
Being a public company means Facebook will be forced to share information about itself. Founder and chief executive Mark Zuckerberg previously has been reluctant to do so.
The largest hurdle Facebook faces is the possibility of privacy regulations. In the past, it alienated users over privacy concerns. In November, Facebook settled with the Federal Trade Commission, which had accused it of deceiving users about privacy settings.
Market Cap Somewhere Between $75 Billion - $100 Billion
Not only is Facebook to become the largest technology IPO to debut in US history, it could also become the sixth largest IPO debut overall in the US and the 15th largest worldwide. Its filing has received more hype than any other technology company’s debut.
It is predicted Facebook will have a market cap somewhere between $75 billion and $100 billion. This puts it at the low end for technology companies, but gives it a market capitalization higher than Amazon, General Motors and Disney.
However, as The Washington Post points out, the majority of Facebook’s revenue comes from advertising, and advertisers, as well as internet users, can be fickle. If Facebook can convince investors, it can monetize its user base through apps and games to possibly be worth over $100 billion.
Charlene Yi told the New York Times: “Facebook’s IPO marks another stage of the internet’s evolution. It’s so valuable, because it’s not just about content, it’s about our connections.” Yi is the founder of Altimeter Group, a technology consulting firm.
Stock trading is expected to begin by June.
Key Statistics - Facebook (source: Facebook.com)
- Facebook’s active user base totals more than 800 million.
- On any given day, more than 50% of Facebook’s active users log on.
- More than 350 million active Facebook users access their accounts via mobile devices.