Status Updated: Facebook Files Papers For IPO
Let the clever social media-related headlines and ledes begin:
"Facebook made a much-anticipated status update Wednesday: The Internet social network is going public eight years after its computer-hacking CEO Mark Zuckerberg started the service at Harvard University." (The Associated Press)
The wire service adds that:
"In its regulatory filing with the Securities and Exchange Commission, Facebook Inc. indicated it hopes to raise $5 billion in its IPO. That would be the most for an Internet IPO since Google Inc. and its early backers raised $1.9 billion in 2004. The final amount will likely change as Facebook's bankers gauge the investor demand."
That SEC filing, by the way, is posted here.
Wired wonders whether shares will live up to the initial hype:
"The company's relative maturity [it's 8 years old] means that most of the millions — or billions — that could be made from buying public shares have probably already been made. This could mean Facebook's IPO will meet a fate similar to that of this year's other high-profile tech IPOs. Both Zynga and Groupon actually sank below their IPO share price — right out of the gate — a sign of failure on Wall Street. "The tech class of 2011 has underperformed," said Paul Kedrosky, a prominent financial blogger and senior fellow at the Kauffman Foundation, in an interview. "Because of secondary markets, that post-IPO balance happened pre-IPO. My expectation is, Facebook will see a very similar phenomenon."
On All Things Considered, NPR's Steve Henn said trading in Facebook stock probably won't start until sometime in the second quarter of this year. Since the company will likely be valued around $100 billion, he says, it's obviously only selling "a slice" of itself. The money it raises, according to Steve, may help it start buying up other firms.