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Facebook looking at IPO in first quarter: report
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Facebook Founder & Chief Executive Officer Mark Zuckerberg, launches Facebook's ''open compute program'' at Facebook's headquarters in Palo Alto, California April 7, 2011.
Credit: Reuters/Norbert von der Groeben
NEW YORK |
Mon Jun 13, 2011 3:56pm EDT
NEW YORK (Reuters) - Facebook is preparing to file for an initial public offering as early as October or November that could value the popular social networking site at more than $100 billion, financial news channel CNBC reported on Monday.
Goldman Sachs is leading the chase to manage the lucrative offering, which could come in the first quarter of 2012, CNBC said.
With more than 500 million users, Facebook is the world's most popular Internet social network and one of the most hotly-anticipated initial public offerings on Wall Street.
Facebook, whose chief operating officer last month told Reuters that an IPO was "inevitable," declined to comment on the latest report about its timing for an offering.
Anticipation about a Facebook's future plans comes at a time of heightened investor appetite for shares of fast-growing social networking companies.
Professional networking site LinkedIn Corp launched its own IPO last month, valuing the company at about $7 billion.
Earlier this month, daily deals site Groupon Inc filed to raise up to $750 million in an IPO, fueling speculation that Internet valuations have become too rich.
Founded in a Harvard dorm room in 2004 by the now 27-year-old Mark Zuckerberg, Facebook threatens Internet companies like Google Inc and Yahoo Inc as it becomes a popular online destination for Web surfers and an important marketing channel for advertisers.
Facebook was valued at $50 billion earlier this year when Goldman Sachs invested in the company.
Recent transactions of Facebook shares on the secondary market have valued the company between $78 billion and $81 billion, according to information on the website of Sharespost, an exchange for trading shares in private companies.
Facebook is expected to generate roughly $4 billion in advertising revenue in 2011, up from $1.86 billion a year earlier, according to market research firm eMarketer.
(Editing by Steve Orlofsky, Gerald E. McCormick and Bernard Orr)
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Comments (3)
JamesJansson wrote:
How could it be worth more when usage is actually decreasing? See link for proof http://jamesjansson.com/blog/2011/06/13/facebook-growth-slowing/
Jun 13, 2011 1:55pm EDT -- Report as abuse
JohnFx wrote:
While I don’t completely disagree with Jansson’s assesment, the decreased usage is simple to explain. When folks first sign up for Facebook, they are on it all the time, finding games and keeping up on messages. As they are on it for awhile, the games become pointless and people begin to realize they only need to check once or twice a day, if even that often. People also begin to use it more offline. I check it a few times a day, but I also get emails through to my phone, making going online less necessary to stay in touch. The emails sent to and from phones don’t show up as web clicks.
However, ads on Facebook work .. I have clicked through often enough to know that they get my attention. And I used them once for a charity event and received numerous clicks that brought in more than I spent.
Valuation has some value when pricing a stock, but so do supply and demand. While P&E is a good place to start, the longevity of a company coupled with the possibility of amateur investors hoping to get in on another Google will drive the likelihood of initial investors hoping to make a quick buck. LinkedIn was a good example. I couldn’t get in on the first wave, but I also knew better than to jump in at the opening bell and buy it. At 45 it was a good deal, but even at it’s current price of 74, I think I’ll pass.
Purchasing stock is partly a guessing game trying to stay ahead of what the sheep do. For every person that sells thinking a stock has run out, or there are better opportunities elsewhere, there is another person buying that same stock thinking just the opposite.
Jun 13, 2011 3:36pm EDT -- Report as abuse
justuhvoter wrote:
Wonder why the American economy is collapsing? Look at Facebook. It took the Ford family four generations, billions invested and hundreds of thousands employed to build their business, which contributed massively to a strong American economy. Facebook has zero invested, and only 2,000 white collar employees who contribute virtually nothing to the economy. Yet it is valued at $100 billion?? No wonder the economy is collapsing — the Wall Street sleaze are barely out of bailout and already right back for the quick buck.
Jun 13, 2011 4:57pm EDT -- Report as abuse
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