FACEBOOK IS considering raising about $10 billion (€7.5 billion) in an initial public offering that would value the world’s largest social-networking site at more than $100 billion, a person with knowledge of the matter has said.
The company may file for the IPO before the end of the year, said the person, who asked not to be identified because the deliberations are private. Exact timing for the filing hasn’t been determined, the person added.
Facebook’s $100 billion valuation would be twice as high as it was in January, when the company announced a $1.5 billion investment from Goldman Sachs and other backers. The IPO is far enough away that the details may change, according to Lise Buyer, principal of the Class V Group, an IPO advisory firm.
“It’s far too early to accurately predict where the valuation will be on deal day,” Ms Buyer said.
At $10 billion, the offering would raise more money than any other technology IPO, a sign that Facebook expects investors to clamour for a piece of the social-networking company. The amount would dwarf that of the previous record holder, Infineon Technologies, which generated $5.23 billion in its 1999 debut. Agere Systems raised $4.14 billion in 2000, putting it second.
Facebook expects to be required by US regulators to disclose financial results by April 30th, 2012, if it does not go public by then, the company said in January. Facebook decided to wait until 2012 for its IPO to give chief executive Mark Zuckerberg more time to gain users and boost sales, people familiar with the matter said last year.
Facebook, which boasts more than 800 million users, also is increasing its focus on mobile technology, aiming to take advantage of the shift to smartphones and tablets. Google, one of Facebook’s chief rivals in the internet advertising market, raised $1.67 billion in its IPO in 2004. It is now valued at $190.4 billion.
Facebook’s revenue will more than double to $4.27 billion this year from $2 billion in 2010, research firm EMarketer said in September. At $100 billion, Facebook would be worth 23 times that projected revenue, signalling that it expects its faster growth rate to justify a premium valuation over rivals. – (Bloomberg)
