Facebook's IPO appears likely to happen in 2012
By Charlotte Raab, AFP
January 2, 2012, 12:23 am TWN
NEW YORK -- Facebook co-founder and chief executive Mark Zuckerberg has deflected talk of going public for years but it looks like it is finally going to happen in 2012.
"The Facebook IPO will be the biggest financial event in the tech industry for 2012," Forrester Research analyst Josh Bernoff said, and one of the biggest initial public offerings (IPOs) ever in the United States.
Nick Einhorn, an analyst at Renaissance Capital, said he expects Facebook to file its IPO paperwork with the U.S. Securities and Exchange Commission (SEC) in the first quarter and start trading on Wall Street later in the year.
With an expected deal size of US$10 billion, Facebook would slip into sixth place on the list of largest U.S. IPOs between AT&T Wireless Group (US$10.62 billion) and Kraft Foods (US$8.68 billion), according to Renaissance Capital.
A market capitalization of US$100 billion would put Facebook on a par with McDonald's (US$103 billion), well ahead of Boeing (US$54 billion) but behind Apple (US$376 billion) and another Internet giant, Google (US$209 billion).
Facebook's current annual revenue, mostly from online advertising, is estimated to be around US$5 billion compared to US$108 billion for Apple and US$36 billion for Google.
Valuing the social network giant will be difficult, Einhorn said, just as it was for several other Internet companies that went public in 2011.
Career-oriented social network LinkedIn was undervalued while online daily deals site Groupon and social games titan Zynga have both been trading at or below their list price.
"I think Facebook is still a fairly young company in a lot of ways," Einhorn said. "But it's certainly established, and it's a significant company. Investors will recognize that."
Zuckerberg, who co-founded Facebook in his Harvard University dorm room eight years ago and has seen it grow to more than 800 million members, recently seemed to bow to the inevitability of going public.