Facebook’s marketers and financial executives headed out on the road over the weekend to place the social network’s value proposition before potential big-time investors in cities such as Chicago, Washington, D.C., New York and Los Angeles.
In preparation for this 11-day road trip before the initial public offering hits the stock market on May 18, Facebook released a 30-minute video for would-be investors, capsulizing the company message for them.
The video had been put up on YouTube but was yanked over the weekend after amassing several thousand hits. Atlantic Wire, in a story published May 5, described it as a “mesmerizing” video that is a video love letter to would-be investors.”
The social-networking giant will stage its first meeting May 7 to talk to investors. CEO Mark Zuckerberg reportedly will 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.
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.
What Might Facebook Do With Its Upcoming Treasure?
There are any number of things for which Facebook could use all that money.
“Obviously they’re going to keep growing the user base until they get up to 1 billion users,” David Sacks, CEO of enterprise social network Yammer, told NBC Bay Area’s Scott McGrew in an interview on the station’s “Press:Here” television show on May 6.
“I also think that Facebook would like to have a war chest they could use to acquire any and all of the technology they will need. They are a business that’s laden with option value,” Sacks said.
“They could go into search and challenge Google; they could open up their advertising system to the rest of the Internet to compete with Google; and there’s a lot more they could do on mobile.”
One of the Largest Debuts for a U.S. Company
Facebook said in its Feb. 1 S-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.
Facebook has set a price range of $28 to $35 for its initial public offering of stock, potentially valuing the Menlo Park, Calif.-based company at $79.3 billion, by far the biggest IPO in Silicon Valley history. The IPO could raise as much as $11.8 billion, analysts estimate.
Investors are expected to flock to the highly anticipated IPO, though some have noted concerns about the social network’s long-term growth.
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.