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Dublin: 10 °C Saturday 18 May, 2013

Facebook set to file $5 billion IPO today

The initial public offering of stocks in the social networking giant has been long anticipated and could eventually make Bono a rich man…

Mark Zuckerberg
Mark Zuckerberg
Image: Paul Sakuma/AP/Press Association Images

FACEBOOK IS SET to file papers with US regulators later today and make a $5 billion initial public offering, according to numerous reports.

The social networking giant has selected Morgan Stanley and four other book-runners including Bank of America, Merrill Lynch, Barclays Capital and JP Morgan to handle the IPO, targeting a sale of $5 billion of shares, according to Reuters which cites IFR.

The website is valued at up to $100 billion so the initial $5 billion target could be ramped upwards in the coming months if there is investor demand. Reuters says this ‘coming-out party’ would likely dwarf tech rival Google’s IPO of $2 billion.

Analysts expect it to be the biggest market debut in US history.

The public filing has been long anticipated by investors with those who own shares in the company, including founder Mark Zuckerberg, set to become instant billionaires.

Zuckerberg founded the social network in his dorm room at Harvard university eight years ago and currently owns 24 per cent of the company.

U2 duo Bono and The Edge would also likely become billionaires if there is a subsequent full stock market flotation with their investment vehicle owning a 1.5 per cent stake in the site.

The Telegraph reports that going public will provide several challenges for Facebook and its CEO Zuckerberg who will be under pressure to ensure quarterly results meet or exceed expectation among Wall Street investors.

Facebook will need to balance its need to deliver revenue from advertising while at  the same time not turning off users who have in the past expressed concerns with how the information it shares with the website is used.

But investors are certainly looking forward to it.

“Pandemonium is what I expect in terms of demand for this stock,” says Scott Sweet, senior managing partner at IPO Boutique, an advisory firm. “I don’t think Wall Street would want to anger Facebook users.”

- additional reporting from AP

Report: Facebook to file for entry to stock markets next week

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Comments (32 Comments)

  • Ah remember when bebo was worth hundreds of millions? Seen it recently begging for change outside my local spar

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  • And here comes the next IT Bubble burst, Thanks for that mark!

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  • There is no way Facebook is worth $100 Billion dollars……and watch out for privacy as they try to maintain this value going forwards.

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  • Well as long as Bono makes a few quid from it……

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  • Share price will collapse before end of year. Facebook is a fad. No wonder they are floating their shares now. Get out when the going is good. Can’t blame them really. Anyone who invests in this deserves to get burnt.

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    • It’s fad to people that dont use it for promotion /advertising /business networking. Although once the standard end user starts to get bored it’s game over.

      Look at how google have progressed, now there’s a company I can’t see leaving us for a long time.

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    • Aydo 01/02/12 #

      Everyone I know bar myself and 2 people are on it. For years now.
      Seems more than a fad to me.

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    • Alan.V 01/02/12 #

      Adrian,
      I agree, Google are on the ball and seem to know exactly what people want.

      Reply
    • Jay funk 01/02/12 #

      No way shares will collapse this year, as they are only selling 5% of the shares this offering and unlikely to of sold more then 25% of shares this year, but it will collapse but i’d say it will take 22 months when they release their end of year profits and we find it is only taking in a few hundred million in and have a low profit margin. This will spark a new downturn in america and this will finish the euro of for once and for all.

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    • @Jay – Facebook seeing a share price drop when they report revenue figures will spark a downturn in America? Get in off the grass will ye

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  • J.p Morgan, Barclays & M lynch, the very ones who caused the recession and yet continue to thrive while their original managing directors etc work as advisers to Obama, kept all their millions and were never prosecuted! US still runs big business unregulated so anyone who gets into bed with this lot show themselves to also be greed driven. guess it time to close my fb account (don’t like timeline anyway!).

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  • Good luck to them…and all this.scaremongering about privacy is a joke .. facebook is not obligatory ..they dont force u to put up photos and give status updates about where u are

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  • 100bn, with no real tangible assets in relative terms…..??? Whats its turnover…??? Walk a million miles from buying any of this stock

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    • Jay funk 01/02/12 #

      If I could I’d buy stock, and sell it quickly (within a month) as it will defiantly rise at minimum of 20%. It impossible for it not too, there is too much at risk if it doesn’t. Every pension fund is going to have to buy some shares as they are going to be one of the largest shares on the market so they have to buy a portion of the shares.

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    • Agreed. The asset will probably make a return of 17/18%. over the first month

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  • Fb will outlive all of us , as long as people in their multi millions keep using it to post the most uninteresting idiotic self promoting garbage … There seems to be an unending appetite for this kinda thing in this smart age …

    Anyway bono could do with an ego boost .
    Lol

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  • Why not? Is it so hard to believe that something that began in a college dorm room can be worth that much?

    Apple started in a garage, and is worth 350bil.

    Google started as a project at Stanford, is exclusively Internet-based, and is worth around 180bil

    In 2010 Facebook’s (estimated) profit margin was 30%, compared to Google (29%) and Apple (28%).

    Why couldn’t Facebook reach those heights? Bebo failed because they stood still for too long – just like Myspace. They didn’t have the same innovation. I was on Myspace & Bebo, and got bored because they didn’t change, they didn’t innovate, they offered little or nothing to businesses. They were just, y’know, there. Don’t underestimate the impact Facebook have on business. I work in the web design industry, and in the last 18 months alone, about 75% of our clients have started using, and are active on Facebook. And they swear by it, and to a lesser extent, Twitter. When it comes to the Internet, traffic IS money, and Facebook, Google and Twitter are the biggest drivers of traffic out there. Businesses know that, and WILL pay accordingly.

    Facebook has far exceeded people’s expectations up to this point. I’m guessing that Apple and Google are being used somewhat as a benchmark. Make no bones about it, Facebook IS in the same leasue as these guys, make no mistake about it. It’s NOT a fad, and is here for the long haul, whether you agree with its “opt out” approach to new features or not.

    Only time will tell whether the 100bil valuation is ludacris (I don’t see a time frame mentioned), but to dismiss it out of hand is also ludacris.

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  • For those rushing out to buy this share I can only remind you of one word…………………………. BEBO

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  • all the talk about bono.. the man has done more for world peace imaginable.. dose that not count for something ?

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  • Facebook is easily worth 100 billion. The global presence it has on the web , massive. Is there any date set for when it will be released to the stock exchange ?

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    • Nothing in this world is worth 100 Billion. 100 Billion isn’t even worth 100 Billion!

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    • Warren buffets net worth is $64.4 billion. He’s an individual. There are companies out there making more than an individual. I not being rude, but certainly facebook is worth in excess of there $75billion market

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    • I’m not sure if someones net worth can be valued at all. Does he have $75 Bn in tangible assets or cold hard cash? I’m guessing he does not, it all exists on paper or on a computer screen. Facebook may be regarded as being worth 100 Bn’s but tomorrow when the ‘computer says NO’ that worth changes along with its value. Its happened before, anyone remember Eircom Lolz.

      God I love quoting from wiki…. long live wiki…
      “Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share.In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG’s board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General’s office agreed to a settlement in which AIG would pay a fine of $1.6 billion.[29] In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing ‘corporate governance concessions’.[30]

      This example and there are many others as to why the world has gone bonkers!!! I reiterate nothing is worth 100 Billlion. :) IMHO :)

      Reply
  • How does Facebook actually make money?

    A company that does not really have a customers base is not really a company at all. What future has Facebook really got?

    Most people I know do not use Facebook that much. They probably need to delete the account. Leaving unsupervised information floating in cyberspace is pretty dangerous.

    Reply

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