It now looks like Facebook has finally penciled in a date for the company to go public. According to sources close to Facebook, the company has now planned the date for its IPO as May 17th, 2012. As long as Facebook can ready all the necessary paperwork for both its IPO and its recent purchase of Instagram for a cool $1 billion, earlier this month.
Facebook’s Valuation and IPO Goals
Facebook is currently valued at around $100 billion, suggest sources, and it is thought that Facebook is looking to raise $10 billion or less on the $100 billion valuation. This valuation, with 2.51 billion fully-diluted shares outstanding, would put the share price at around $40. One source close to the proceedings explained: “Investors want as high a price as possible so that the secondary market won’t look like a problem.”
The $100 billion valuation is significant as it places Facebook among the largest technology IPOs in history. For comparison, Google’s IPO in 2004 valued the company at around $23 billion. Facebook’s ambitious valuation reflects its dominant position in the social media landscape, with over 900 million active users at the time of the IPO announcement. The company’s revenue model, primarily based on advertising, has shown robust growth, further justifying the high valuation.
Strategic Acquisitions and Future Prospects
The timing of the IPO is also crucial as it follows Facebook’s strategic acquisition of Instagram for $1 billion. This purchase is seen as a move to bolster Facebook’s mobile strategy and to tap into Instagram’s rapidly growing user base, which complements Facebook’s own. The acquisition is expected to enhance Facebook’s photo-sharing capabilities and provide new revenue opportunities through advertising on the Instagram platform.
Moreover, Facebook’s IPO is anticipated to have a ripple effect on the tech industry. It is expected to set a benchmark for other tech companies considering going public. Companies like Twitter, LinkedIn, and Snapchat have been closely watching Facebook’s IPO process, and its success could encourage more tech firms to enter the public market.
As more information becomes available or is confirmed by Facebook, we will keep you updated. The IPO is not just a financial event but a significant milestone in Facebook’s journey from a college dorm room project to a global social media powerhouse. Investors and market analysts are keenly observing how Facebook will navigate the challenges of being a public company, including increased regulatory scrutiny and the pressure to maintain its growth trajectory.
In conclusion, Facebook’s planned IPO on May 17th, 2012, marks a pivotal moment in the company’s history. With a valuation of around $100 billion and the recent acquisition of Instagram, Facebook is poised to make a significant impact on the stock market and the tech industry at large. The success of the IPO will depend on various factors, including investor confidence, market conditions, and Facebook’s ability to continue innovating and expanding its user base.
Source: Tech Crunch
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