Facebook Announces Plans for Stock Market Explosion

Initial public offering to be the biggest sale of shares by an Internet company

Facebook, 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Once withdrawn and shy, the adjective of 'cocky' has been increasingly used to describe Facebook founder Mark Zuckerberg as of late.

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.
Valuation justified

There have been reports that Facebook could be worth $100 billion, roughly the same as U.S. giants Amazon and McDonald's.