FACEBOOK HAS SET itself up for a potential valuation of up to $96 billion dollars when its shares finally go on public sale later this year.
A regulatory filing yesterday confirmed that the company would sell about 337.4 million shares in its initial public offering, with those shares valued at between $28 and $35 each.
Bloomberg notes that this valuation would mean the company would raise around $11.8 billion in its IPO – making it easily the most lucrative IPO in internet history.
Google, when it went public in 2004, raised $1.9 billion through the public sale of its shares; German firm T-Online International raised $2.8 billion when it floated in 2000.
Bloomberg’s compilations also note that the company would therefore be valued at 24 times the amount it took in in sales last year, a relatively high amount when compared to the likes of Google, whose value – currently $199 billion – is equivalent to five times its turnover.
Co-incidentally, the 24-times-sales radio also reflects the increase in the social network’s income in the last four years: its sales for 2011 were 24 times its sales for 2007.
The documentation shows the company’s founder and CEO, 27-year-old Mark Zuckerberg, could potentially become an instant billionaire (in cash terms) when the shares are launched.
Zuckerberg is selling 30.2 million shares – around 5.6 per cent of his total stake – which would bring in $1.05 billion if the shares sell at $35 each.
His remaining stash of 500-million-or-so shares (which include preference shares worth proportionally more than regular stock) would be worth up to $40 billion, cementing his status as one of the world’s foremost self-made billionaires.
Analysts had expected Facebook to aim for a total valuation of around $100 billion, but the slightly smaller valuation is unsurprising given how the company’s financial results for the first quarter suggested a deceleration in profits.