The world’s most popular social networking site, with over 800m active users, has filed for an IPO amidst much frenzy and speculation. It’s going to be among the biggest ever initial public offerings by a technology firm in the world. Investment experts point out that the sentiments are quite similar to those at the time of the Google IPO.
The shares have been changing hands at levels valuing it at roughly $80bn in private secondary markets, and Facebook could well be worth anything between $75bn and $100bn by the time it hits Wall Street, it is believed. There are indeed expectations that a public listing would put an astounding $100bn price tag on Facebook, though a section of stock market feel that might not be the case amid recent market volatility and also poor response to other internet IPOs in recent times.
Mark Zuckerberg, due to turn 28 this May, along with his early visionary collaborators, created Facebook in dorm room of a Harvard University eight years ago, quickly taking it from a despised social distraction for college students to a global utility reshaping the World Wide Web. Not since Google has any online company managed to build a service of this scale and influence, which has become an integral part of our daily lives and internet habits. So the frenzy around the IPO is really understandable. According to an estimate, Facebook has made revenues to the tune of $3bn- $6bn last year.
But what’s the world media making out of the Facebook IPO. Reactions have been diverse from caution to exuberance, from praise to skepticism. Let us sample a few to gauge the mood prevailing as far as the proposed public listing of Facebook is concerned:
“By pushing his social network onto the stock exchange, the still youthful CEO stands to reap billions putting him in the upper echelons of the one percent. Yet in his letter Zuckerberg maintains that the company’s success is partly attributable to the way that it has integrated the good elements of the hacker creed, such as its meritocratic nature and its emphasis on engineering, into its day-to-day operations.” (Reuters)
“Its founder and CEO owns more than a quarter of the company. Zuckerberg holds roughly 534 million shares. If that higher valuation holds up when the company goes public, Zuckerberg would be worth $24 billion or more. He has also collected some cold, hard cash over the years. Last year, he made $483,000, took home a $220,500 bonus, and received additional perks like private jet travel valued at $783,000. His regular paycheck is about to be slashed, though.” (CNN)
“A lofty valuation for Facebook would evoke the grandiose ambitions of the previous Internet boom in the late 1990s. Back then, dozens of unproven companies went public at sky-high valuations but later imploded. Facebook is still a small fraction of the size of rival Google. But many analysts believe Facebook’s fortunes will rapidly multiply as advertisers direct increasingly more capital to the Web’s social hive. Investors now have to try to ignore the I.P.O. hype and soberly sift through the first batch of its financial statements to gauge the company’s potential.” (The NYT)
