Wall Street Journal reported that Facebook will officially announce their IPO on May 18. To prepare for the big day, three of the company’s executives Mark Zuckerberg, Sheryl Sandberg, and David Ebersman will take a small tour starting early next week to meet up with investors to talk about stock investments.
Facebook could raise as much as $10 billion which could increase the company’s value to $100 billion and beat Google as the highest internet IPO in history. Currently, Google holds the top spot at $1.9 billion.
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More
There are concerns that Facebook is not worth as much as speculated. According to Larry Dignan from CNET, Facebook “is starting to resemble a more mature Web business” despite the fact that it’s relatively young in years. He also suggested that the company may have to generate more money by placing more advertisements, but that would drive readers away.
The company recently adjusted their S-1 which now reports that there are 901 million monthly active users, 300 million photos added a day, and 125 billion friendships. The report also included Facebook’s acquisition of Instagram for $1 billion and the purchase of AOL patents from Microsoft.
I think Facebook has a good shot at raising $10 billion or a little less than that. The company is the leader in social media and their Instagram buyout was probably one of the smartest moves ever made in the history of social media. I think that acquisition alone adds significant value. Of course, none of that may matter as their company’s shares have been downgraded. Their enterprise valuation was reduced from $82 billion to $75 billion. What will happen that day is anyone’s guess.
Facebook filed for their initial public offering back on February 1st 2012. Morgan Stanley is their lead underwriter. The company’s ticker symbol on the NASDAQ list will be FB. Last year it was reported that they earn $3.7 billion in revenue.