Unbridled excitement for Facebook IPO: company hopes to raise USD 5 billion
Eagerly awaited is perhaps an understatement. The IPO of social networking leviathan Facebook is whipping investors into frenzy and records look set to tumble as they rush for a share. After previously announcing the decision, Facebook’s accounts and target for the Initial Public Offering ( IPO ) have now been released. The company hopes to raise USD 5 billion from the IPO, half the expected amount. Analysts estimate the company to be worth USD 100 billion, and the investment consultants consider Facebook’s previously unreleased profits impressive. Net income has increased rapidly in the last three years, USD 229 million in 2009, USD 606 million in 2010 and USD billion for last year. “The company is a lot more profitable than we thought,” said Kathleen Smith, principal of IPO investment advisory firm Renaissance Capital.
The figures released also show that founder Mark Zuckerberg (in picture) has a 28.4 percent stake in the company. In a letter included with the information, Zuckerberg outlines Facebook’s sharing philosophy and lauds it as rivaling the printing press as a motor for freedom of expression and the exchange of ideas. Investors, however, may be more interested in the final part of the letter. “As people share more, they have access to more opinions from the people they trust about the products and services they use. This makes it easier to discover the best products and improve the quality and efficiency of their lives,” wrote Zuckerberg. Currently revenue is generated via advertising and investors want to see what potential for growth Facebook has. Despite the founder’s idealistic spiel, commentators suggest public listing will potentially have an impact on the company and its objectives.
Facebook was founded in 2004 and now employees over 3,000 people. The network had 845 million active users at the end of 2011, 80 percent of which outside US and Canada.
Liam Lever, liam@romania-insider.com
(photo source: Guillaume Paumier / Wikimedia Commons, CC-by-3.0)
