Facebook Announces Plans for Stock
Initial public offering to be the biggest sale of
shares by an Internet company
the world's largest social networking site has announced plans for a
stock market flotation. The Web site said it would seek to raise $5
billion, or about half the amount many analysts expected. The
initial public offering or IPO is still expected to be the biggest
sale of shares by an internet company.
Once withdrawn and shy, the adjective of 'cocky' has been
increasingly used to describe Facebook founder Mark Zuckerberg as of
LOS ANGELES, CA (Catholic Online):
Facebook, just eight years old and started by Harvard University
students currently has 845 million users. The site raked in a
profit of $1 billion last year.
Facebook filed its intention to float with the Securities and
Exchange Commission after the U.S. stock markets closed.
The documents have proved to be a revelation as for the very
first time they revealed information about Facebook that had
previously only been the subject of speculation. Chief among
them was the fact that Facebook's net income in 2011 rose 65
percent to $1 billion, off revenues of $3.71 billion.
It was also disclosed that Facebook founder Mark Zuckerberg owns
28.4 percent of Facebook and has more than 50 percent of the
voting rights. The network also has 845 million monthly users of
which 443 million are daily users.
"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," Zuckerberg said in a letter.
"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."
The $5 billion being raised would be the most for an internet
initial public offering since Google and its early backers
raised $1.67 billion in 2004.
"The company is a lot more profitable than we thought," Kathleen
Smith, principal of IPO investment advisory firm Renaissance
Capital says, noting that Facebook's numbers were "very
impressive." Smith also said that Facebook needed to talk more
about where it saw its growth coming from.
"What new areas of business is it expecting to pursue beyond
display ads?" she said.
Many say that the final amount Facebook will raise is likely to
change as Facebook's bankers gauge the investor demand for the
shares over the coming months.
The story of Facebook was made the subject of a 2010 Hollywood
film, "The Social Network," and the firm has made the verb "to
friend" a part of everyday language.
There have been reports that Facebook could be worth $100
billion, roughly the same as U.S. giants Amazon and McDonald's.