Report says Facebook seeks $10 billion in IPO

Nov 29, 2011

(AP) -- Facebook might finally be laying down the groundwork for a highly anticipated initial public offering, long expected to take place sometime after April 2012.

The is reporting that the world's largest online social network is looking to raise as much as $10 billion in its IPO. The Journal cited people familiar with the matter but did not identify them by name.

The amount would value at as much as $100 billion, according to the report. That's more than four times the that . had at the time of its 2004 IPO. This is at least the second time this year that the Journal has floated the $100 billion value for Facebook. It reported in May that the company was growing its profit so fast it could justify such a sky-high valuation.

Federal rules require companies with at least $10 million in assets and more than 500 shareholders to disclose its quarterly financial results and other details. The reporting requirement kicks in 120 days after the fiscal year in which a company exceeds the shareholder threshold for the first time.

Facebook's fiscal year ends Dec. 31, so it would have until late April 2012 to comply with this requirement, having hit the threshold this year.

Founded in a Harvard dorm room in February 2004, Facebook, now based in Palo Alto, Calif., has tried to hold off on an IPO to focus on building its product rather than pleasing investors. But the reporting rules, along with early employees and investors eager to cash in on their stock, are putting it in a bind.

A slew of smaller Internet and social media companies have been trickling on to the public stock market this year. Professional online network LinkedIn Corp. was the first to test the waters in May. Since then, the online deals site Groupon Inc., the Pandora Media Inc. and others have gone public. Others, including the reviews site Inc. and the online game company Zynga Inc., are planning to do so.

Though hotly anticipated, the latest crop of Internet IPOs has not gone smoothly. Groupon's stock is now trading below its IPO price. It closed at $15.24 on Monday, down 23.8 percent from its $20 IPO price. Pandora has also fallen below its IPO price, though LinkedIn, among the few that's been profitable, is still well above it.

On the secondary market SharesPost, where private company stocks are traded, Facebook was recently valued at about $73 billion. The shares are generally sold by former employees or early investors in these companies, and often there are more buyers than sellers.

Facebook spokesman Jonny Thaw said Facebook is "not going to participate in speculation about an IPO."

Explore further: Android grabs 85% of smartphone market: survey

1.7 /5 (3 votes)
add to favorites email to friend print save as pdf

Related Stories

Facebook 2012 IPO could top $100 billion: CNBC

Jun 13, 2011

Social network Facebook is likely to go public in the first quarter of next year with a valuation of over $100 billion, the CNBC business news network reported on Monday.

Facebook raises $1B more from non US investors

Jan 21, 2011

(AP) -- Facebook said Friday it has raised $1 billion from non-U.S. investors, which combined with an infusion from Goldman Sachs and Russia's Digital Sky Technologies in December, brings the haul from its latest round of ...

Online review site Yelp planning IPO: WSJ

Nov 08, 2011

Yelp is moving ahead with an initial public offering that would value the website which posts user reviews of businesses and services at $2 billion, The Wall Street Journal reported on Tuesday.

'FarmVille' creator Zynga to go public

Jul 01, 2011

(AP) -- Zynga, the online game maker behind "FarmVille" and other popular Facebook pastimes, is going public, the latest in a crop of high-valued Internet IPOs expected after LinkedIn Corp. showed that the ...

Recommended for you

Android grabs 85% of smartphone market

14 hours ago

Smartphones powered by the Android operating system captured 85 percent of the worldwide market in the second quarter, threatening to marginalize rival platforms, a new survey shows.

Chinese man brings gay conversion therapy lawsuit

19 hours ago

(AP)—A gay Chinese man said Thursday he was suing a psychological clinic for carrying out electric shocks intended to turn him straight, as well as the search engine giant Baidu for advertising the center.

Alcatel loss narrows in 2Q but revenue stagnates

20 hours ago

(AP)—Telecommunications equipment company Alcatel-Lucent SA says its net loss narrowed in the second quarter thanks to lower accounting charges, while revenue stagnated and restructuring charges mounted.

User comments : 0