Facebook Decides on May 18 for IPO

 
 
By Chris Preimesberger  |  Posted 2012-05-01
 
 
 

Facebook has set May 18 for its initial public offering of stock, to be preceded by an 11-day road show for potential investors, The Wall Street Journal reported May 1.

The social-networking giant will hit the road starting May 7 to talk to investors. The Journal said its sources indicated that CEO Mark Zuckerberg would make appearances at some of the investor events.

Facebook filed its application with the Securities and Exchange Commission for its public stock offering Feb. 1. The IPO is expected to raise from $5 billion to $10 billion and value the company at up to $100 billion, according to the published opinions of numerous Wall Street analysts.

One of the Largest Debuts for a U.S. Company

When the stock is issued on May 18, Facebook will represent the largest market debut for a U.S. company in nearly four years. By comparison, Google banked $1.7 billion in its Aug. 19, 2004, IPO.

In the history of U.S. business, Visa, General Motors and AT&T Wireless are the only companies to have IPOs totaling more than $10 billion.

Facebook said in the Feb. 1 filing that it intends to trade its shares under the ticker symbol "FB." Morgan Stanley will lead the IPO, with Goldman Sachs assisting. Facebook will trade on the IT-dominated NASDAQ exchange, and some analysts have predicted that the starting sale price will be in the $90 to $150 range.

In the publicly available S-1 SEC document, Facebook revealed a number of business metrics, including that it banked revenue of $3.7 billion (up 47 percent from 2010) with net income of $1 billion in calendar year 2011.

The social network also revealed that it services an average of 845 million users every month, with more than half that number using it daily and about the same number accessing the network via a mobile device.

Zuckerberg's Letter to the SEC

In the S-1, CEO and founder Mark Zuckerberg, who owns 28 percent of Facebook and will be worth $20 billion to $25 billion after the sale, included a personal letter explaining Facebook's purpose to the SEC.

"Facebook was not originally created to be a company," Zuckerberg wrote. "It was built to accomplish a social mission: to make the world more open and connected. We think it€™s important that everyone who invests in Facebook understands what this mission means to us.

"We think a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services. €¦ 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," Zuckerberg wrote.

The IPO filing revealed that Zuckerberg received $1,487,362 from Facebook in 2011.

Chris Preimesberger is eWEEK's Editor for Features and Analysis. Twitter: @editingwhiz
 

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