IPO to value facebook at $100 bn

Facebook Inc is considering raising about $10 billion in an initial public offering (IPO) that would value the world’s largest social-networking site at more than $100 billion, according to a person with knowledge of the matter.

The company may file for the IPO before the end of the year, said the person, who asked not to be identified because the deliberations were private. The exact timing for the filing hasn’t been determined, the person said.

Facebook’s $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 Inc and other backers. Facebook aims to capitalise on strong demand for social- networking IPOs, said Josef Schuster, founder of Chicago-based IPOX Schuster LLC.

“It’s obviously a very steep valuation,” said Schuster, whose firm invests in IPOs and oversees about $2.5 billion in assets. “They are realising their window of opportunity, and they want to do it sooner rather than later.”

At $10 billion, the offering would raise more money than any other technology IPO, a sign Facebook expects investors to clamour for a piece of the social-networking company. The amount would dwarf that of the previous record holder, Infineon Technologies AG, which generated $5.23 billion in its 1999 debut. Agere Systems Inc. raised $4.14 billion in 2000, putting it second.

Facebook’s IPO is still far away, enough for the details to change, said Lise Buyer, principal of the Class V Group, an IPO advisory firm. “It’s far too early to accurately predict where the valuation would be on deal day,” she said.

Facebook expects it would be required to disclose financial results by April 30, 2012 by US regulators, if it doesn’t go public by then, the company said in January. The company decided to wait until 2012 for its IPO to give chief executive Mark Zuckerberg more time to gain users and boost sales, people familiar with the matter said last year.

Facebook, which boasts of more than 800 million users, is also increasing its focus on mobile technology, aiming to take advantage of the shift to smartphones and tablets. It expects its next one billion users to come mainly from mobile devices, rather than desktop computers. Jonathan Thaw, a spokesman for Palo Alto, California-based Facebook, declined to comment on the IPO plans.

FACEBOOK’S IPO COULD SET A NEW MILESTONE
* Facebook Inc is planning to raise $10 billion through an IPO that could value the social networking site at more than $100 billion, almost twice as high as it was valued in January, when the company announced a $1.5-billion investment from Goldman Sachs
* Facebook aims to capitalise on strong demand for social-networking IPOs. Demand for technology IPOs reignited in November after a lull, setting the stage for Groupon Inc and Angie’s List Inc to go public. But Groupon has lost 24 per cent since its listing
* At $10 billion, the Facebook IPO could raise more money than any other technology IPO. Infineon Technologies AG, the record holder till date, raised $5.23 billion in its 1999 debut. Agere Systems Inc raised $4.14 billion in 2000, putting it second
* Facebook’s valuation is currently pegged at $66.6 billion by SharesPost Inc, which handles trading of privately held companies.It aims to go public between April and June
TOP TEN TECH IPOS SINCE 2000		Amount ($ million)

Infineon Technologies AGMar-005,230.46 Agere Systems IncMar-013,600.00 World Online International NVMar-002,798.59 T-Online International AGApr-002,422.52 Tycom LtdJul-001,956.16 Genuity IncJun-001,913.04 Semiconductor ManufacturingMar-041,798.08 Wanadoo SAJul-001,784.32 Google IncAug-041,666.43 Freescale Semiconductor IncJul-041,581.08 TOP TEN TECH IPOS IN 2011 

Amount
($ million)

Yandex NVMay 1,304.35 Freescale Semiconductor Holdings I LtdMay 783.00 InterXion Holding NVJan 264.88 RIB Software AGFeb 254.58 Fusion-io IncJun 233.70 Hytera Communications Corp LtdMay 214.05 21Vianet Group IncApr 195.00 LandOcean Energy Services Co LtdJan 190.60 Shenzhen Rapoo Technology Co LtdApr 186.25 Qihoo 360 Technology Co LtdMar 175.61

Google Inc, one of Facebook’s chief rivals in the internet advertising market, raised $1.67 billion in its IPO in 2004. It is now valued at $190.4 billion.

Facebook’s valuation is currently pegged at $66.6 billion by SharesPost Inc, which handles trading of privately held companies. The Wall Street Journal earlier reported Facebook was considering the $10-billion IPO with a valuation of more than $100 billion. The company aims to go public between April and June, the journal said. Demand for technology IPOs reignited in November after a summer lull, setting the stage for Groupon Inc and Angie’s List Inc to go public.