With the entire financial world waiting with bated breath on what could easily be termed as the IPO of the Year, Facebook’s deal of $ 10 billion would see its value touch $ 100 million, four times that what Google got as it went public on August 19, 2004. With more than 800 million users worldwide, the world’s favorite social site is expected to sell of a stake of 10% , valued between $7.5bn and $10bn, which would suggest an overall value of $75bn to $100bn. $ 100 billion for a company which interestingly does not produce an item that could be purchased, and hence, whose growth would be charted in other ways for its deemed investors.
Morgan Stanley has been chosen to lead the IPO while Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays Plc and Bank of America Corp. will help manage the sale. Though still undecided on finalising NYSE Euronext or Nasdaq OMX (NDAQ) Group Inc. as its chosen place to trade, it would still rank as the biggest IPO offering by any technology company ever on the planet. The compnay, co-founded by Mark Zuckerberg in 2004 in a Harvard University dorm room, has by now amassed more than 800 million users with a website that lets anyone with an Internet connection construct profile pages, post video and photos and interact with friends.
While on one side, there is intense speculation on the way the new Facebook millionaires would be splurging on their windfall, there is also the biting cynicism based on the recent saturation statistics that have hit their biggest markets. Yet, Facebook’s user base seems to be growing, and along with it, the innovative strategies to subtly push targeted advertising also seem to be yielding its huge dividends, with ad revenue topping $ 3.8 billion in 2011, a rise of 104% , according to eMarketer estimates.
If everything goes right, Facebook would find itself right up there, amongst the astral companions like McDonald’s, Amazon.com and Bank of America – some of the largest public companies in the world.
The world would be watching !
Facebook’s evolving Social network : an overview, courtesy Reuters
Its heard that the bank will end up earning around $500 million in fees through this. No matter what the economic situation is Wall Street is making money.