Facebook IPO

Facebook IPO 'would value each user at $125'

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Facebook, the world's largest Internet social network, is preparing for a initial public stock offering next year.
Facebook is exploring raising $10 billion, initial public offering (IPO) by the end of the year, which would raise the most funds by any tech-based IPO and value the company at more than US$100 billion.

The company started by Zuckerberg in a Harvard dorm room would have double the valuation of Hewlett-Packard, the Journal said. Citing a person with knowledge on the matter, Bloomberg reported that the exact timing for the filing has not been determined as discussions are ongoing. The $100 billion valuation would be twice as high as it was in January, when the company announced a $1.5 billion investment from Goldman Sachs Group and other backers.

At $10 billion, the offering would raise more money than any other technology IPO – dwarfing the previous record holder, Infineon Technologies AG, which generated $5.23 billion in an IPO in 2000. "It's far too early to accurately predict where the valuation will be on deal day."

The social network, which now claims more than 800 million members after seven years of explosive growth, has not selected bankers to manage what would be a very closely watched IPO. Facebook decided to wait until 2012 for its IPO to give Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, sources said. This follows news that the social networking giant had come to a settlement with the US Federal Trade Commission (FTC) regarding complaints in 2009 on how it failed to protect users' privacy or disclose how their data could be used.

With this settlement out of the way, Facebook has one less distraction as it moves toward its IPO, said Francis Gaskins, president of IPODesktop.com, a website that tracks such offerings. Silicon Valley start-ups have this year begun to test investor appetite for a new wave of dotcoms.

Facebook said in January that it will exceed 500 shareholders this year, and that in accordance with SEC regulations, it will file public financial reports no later than April 30, 2012.