Seeking to raise USD 5 billion, giant social networking site – Facebook unveiled what is expected to be Silicon Valley’s largest ever initial public offering, but made it clear to outside investors that they will have little voice in its running, as founder and CEO Mark Zuckerberg will continue to exercise almost complete control.
The IPO of the social network site, having over 800 million active users, is expected to be the biggest sale of shares by an internet company so far.It filed paperwork to go public yesterday. Facebook’s IPO would surpass rival Google’s 2004 offering of USD 1.9 billion. Earlier Google held the record for the largest US Internet IPO.
The Harvard dropout, who launched what would become the social networking phenomenon out of his dorm room, will own 56.9 per cent of the voting shares of a company that is expected to be worth up to $100 billion when it goes public. He will have economic control of about 28 per cent of the shares, ranking him among the richest people in the world.
Investment bank Morgan Stanley will act as lead underwriter, with Goldman Sachs and JP Morgan and others to take secondary positions.Shares are expected to hit the market in May under the stock symbol “FB”.
The company is seeking to raise USD 5 billion, according to this early filing, amounting to a lofty (and still tentative) valuation of almost USD 100 billion. Going public also provides a rare glimpse into the internal stats previously kept private.
The service has 845 million active users, nearly half of which log in and actuate 2.7 billion likes and comments each day. It also shed light on the company’s prior revenue and earnings, with profits of USD 229 million and USD 606 million in 2009 and 2010, respectively- easily bested by a whopping
USD 1 billion in 2011.
As for the Zuckerberg, his 2011 salary of USD 500,000 will be cut to USD 1 as of January 2013, but he’ll be more than comfortable, thanks to a 28.4 per cent stake in the company.
Facebook’s growing popularity among consumers and advertisers has pressured entrenched Internet companies such as Yahoo and Google. In 2011, Facebook overtook Yahoo to become the top provider of online display ads in the United States by revenue, according to industry research firm eMarketer.