VIDEO: Facebook IPO could break records, make billions
Facebook is expected to file for its Initial Public Offering this week and could generate as much as $10 billion for the company. (Photo from Reuters video.)
Signs point to Facebook preparing to make its Initial Public Offering of stock — something poised to make instant millionaires and billionaires out of many of the social network’s employees.
In recent days, speculation has mounted that this would be the week Facebook would take the first step toward an IPO, but filing the appropriate information with the U.S. Securities and Exchange Commission. The Wall Street Journal was first to report the IPO would come this week, perhaps as soon as Wednesday.
“The Internet giant is close to picking Morgan Stanley to lead the deal, these people said. Wall Street banks, many of them struggling amid a crimp in trading profits, have been jostling for a leading role in the deal,” The Journal reported.
The company’s expected to fetch an initial valuation of between $75 billion and $100 billion, according to Reuters, and be one of the largest IPOs ever. It’s expected to raise $10 billion in capital for the company, which would put it in the sixth spot in the U.S., between the IPOs for AT&T Wireless and Kraft Foods. According to the Washington Post, the IPO would have been six times larger than Google.
But some experts point to other recent Web 2.0 IPOs as signs that the latest wave of digital darlings may be just as over-valued as their Web 1.0 counterparts were in the 1990s.
LinkedIn, Groupon and Zynga have all seen their stock prices struggle since going public in the past year.
But Facebook certainly has reason to be optimistic. It has some 800 million users worldwide and a growing share of the interactive advertising space.