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Facebook’s $5-billion IPO has finally landed
Facebook’s much anticipated IPO is here. After months of waiting and speculating, the social media giant finally filed.
The documents filed with regulators say the social network is hoping to raise US$5-billion, making it the biggest tech IPO in history. The company will be trading stocks using the FB symbol.
“Facebook was not originally created to be a company,” wrote CEO Mark Zuckerberg in his S-1 letter.
“It was built to accomplish a social mission — to make the world more open and connected… There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on.”
The US$5-billion IPO will see the company valued somewhere between US$75-billion and US$100-billion. According to the social network, its 2011 revenue was US$3.71-billion, with income from operations coming in at US$1.76-billion. Advertising accounted for 85% of Facebook’s revenue last year, down from 95% in 2010, according to the S-1 filing.
Facebook currently has 845-million active users monthly and 483-million daily users.
Leading the star-studded pack for the social network’s initial public offering is Morgan Stanley (MS), reports Bloomberg, followed by Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM), Barclays Plc (BARC) and Bank of America Corp. (BAC) who will all help with the sale.
Taking the lead on the IPO could send Morgan Stanley “to the top of the U.S. IPO league table for a third year running,” says Bloomberg.
“This means a huge windfall for them,” said Jack Ablin, chief investment officer for Chicago-based Harris Private Bank quoted in Bloomberg. “The fact that they have led so many high-profile social media deals in the last year is proof positive that Morgan Stanley is most likely to be able to get this deal done.”
Facebook follows in the footsteps of a wave of social IPOs which began with LinkedIn as the first major social player to go public. Since LinkedIn, group buying service, Groupon has filed for IPO, Chinese social giant, Ren Ren and Farmville creator Zynga also filed, creating a lot of buzz with its US$7-billion valuation.
