Facebook may file for IPO next week: Report

PTI Updated - March 12, 2018 at 02:05 PM.

Facebook could file as early as next week papers for its much-anticipated initial public offering, which will value the social networking site at up to $100 billion.

Mark Zuckerberg-led Facebook has zeroed in on investment bank Morgan Stanley to lead the deal, the Wall Street Journal reported.

“Facebook could file documents with the Securities and Exchange Commission as early as this coming Wednesday,” the report quoted a person familiar with the matter as saying.

A filing next week is “just one scenario” Facebook executives are considering, it said, adding that executives are also looking at dates later than next week.

The IPO could be launched sometime between April and June. The IPO, seen as the “defining moment for the latest Web investing boom,” could raise as much as $10 billion, pegging the value of the company at between $75 billion and $100 billion.

Started by Mr Zuckerberg in his Harvard dorm, the popular social network currently has more than 800 million users and 3,000 employees.

The Journal said that several top Wall Street banks have been eyeing the role to lead the deal, which could yield them tens of millions of dollars in banker fees, potential new business and “bragging rights’’.

It said while Morgan Stanley would likely land the coveted “lead-left” spot on an IPO financial filing, Goldman Sachs could also be roped in to play a significant role.

Last year, Morgan Stanley was the top internet stock underwriter by leading the IPOs of LinkedIn, Groupon and Zynga.

Facebook’s $10-billion IPO would rank it as the fourth biggest public offering in US history after Visa, General Motors and AT&T.

It would rank Facebook as the biggest US internet offering ever, replacing Google, which had raised $1.9 billion in 2004 at a $23-billion valuation.

The company’s final valuation will depend on various factors, including investor demand for social media, the IPO market and health of the European economy, the report added.

“The IPO will mint a new generation of Silicon Valley millionaires on the level not seen since Google’s offering,” it said.

It will also “test” Zuckerberg’s ability to manage a global company whose financial performance will be put to investor scrutiny every three months, the Journal said.

Notwithstanding the unparallel popularity of Facebook, Mr Zuckerberg has been reluctant to take the company public.

“He has been fearful of the damage an IPO could do to the company’s culture. He wants employees focused on making great products, not the stock price,” the report quoted sources as saying.

However, Facebook would have had to anyway soon start making its financial information pubic, a regulatory requirement companies with more than 500 shareholders have to meet.

Facebook was inching closer to that shareholder number.

The report said Mr Zuckerberg decided it made more sense for Facebook to go public and reap some financial benefit from an IPO, rather than stay private but have to release its financial information.

Investors and analysts have said now is a good time for a Facebook offering.

“The excitement around Facebook is still enormous,” Mr Max Wolff, an analyst at GreenCrest Capital, which researches companies going public, said in the report.

Published on January 28, 2012 05:43