Facebook are rumored to be announcing it’s IPO on May 17th and according to techcrunch.com, Facebook will be valued at around $100 billion, reflecting current levels of trading in the secondary markets (and avoiding SEC scrutiny). Other reports say that the company wants to raise $10 billion at a $100 billion valuation.
Additionally, the Millennial Media IPO was pushed up to early April because Morgan Stanley and Goldman Sachs, which were underwriting both offerings, wanted to “make room” for Facebook. Mobile strategy issues and issues around privacy are of the most concern for institutional investors, and some of the former were pleased by the Instagram buy. Facebook’s IPO will be the biggest of any tech company in history. Google last held the record in 2004 at an impressive $1.67billion.
There are several people who will be cashing in on this announcement:
- Facebook CEO Mark Zuckerberg
- Co-founder Dustin Moskovitz
- Co-founder Eduardo Saverin
- Co-founder Chris Hughes
- Sean Parker, Napster co-founder and Facebook partial owner
Zuckerberg owns 24% of the company, so will make an estimated $25 billion. It looks like Facebook got to this stage by increasing revenue from advertising, Facebook fan pages and display ads.
Letter from Mark Zuckerberg
Zuckerberg included a letter into the company’s filing for the IPO, where he explains the reason he created what is now the world’s largest social networking site in 2004 . The letter provides rare insight into Zuckerberg, who still remains somewhat of an enigma despite the worldwide presence of Facebook.
In it he says:
“Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected. We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do. I will try to outline our approach in this letter.
At Facebook, we’re inspired by technologies that have revolutionized how people spread and consume information. We often talk about inventions like the printing press and the television — by simply making communication more efficient, they led to a complete transformation of many important parts of society. They gave more people a voice. They encouraged progress. They changed the way society was organized. They brought us closer together.”
This infographic created by accountingdegreeonline.net shows how the evaluation breaks down: