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FACEBOOK HAS SET itself up for a potential valuation of up to $96 billion dollars when its shares finally go on public sale later this year.
A regulatory filing yesterday confirmed that the company would sell about 337.4 million shares in its initial public offering, with those shares valued at between $28 and $35 each.
Bloomberg notes that this valuation would mean the company would raise around $11.8 billion in its IPO – making it easily the most lucrative IPO in internet history.
Google, when it went public in 2004, raised $1.9 billion through the public sale of its shares; German firm T-Online International raised $2.8 billion when it floated in 2000.
Bloomberg’s compilations also note that the company would therefore be valued at 24 times the amount it took in in sales last year, a relatively high amount when compared to the likes of Google, whose value – currently $199 billion – is equivalent to five times its turnover.
Co-incidentally, the 24-times-sales radio also reflects the increase in the social network’s income in the last four years: its sales for 2011 were 24 times its sales for 2007.
The documentation shows the company’s founder and CEO, 27-year-old Mark Zuckerberg, could potentially become an instant billionaire (in cash terms) when the shares are launched.
Zuckerberg is selling 30.2 million shares – around 5.6 per cent of his total stake – which would bring in $1.05 billion if the shares sell at $35 each.
His remaining stash of 500-million-or-so shares (which include preference shares worth proportionally more than regular stock) would be worth up to $40 billion, cementing his status as one of the world’s foremost self-made billionaires.
Analysts had expected Facebook to aim for a total valuation of around $100 billion, but the slightly smaller valuation is unsurprising given how the company’s financial results for the first quarter suggested a deceleration in profits.
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You would want to be an idiot to buy this stock. Bebo forever
WARNING: completely pointless begrudging comment here : He’s a lucky lucky man, right place at the right time. Not saying his design and work put into it didn’t make it what it was, but at the of the day, something like fb is exactly where people were headed online wise.
I also think he’d be wise to sell alot of his shares. Not saying its a guaranteed bubble that will burst but who knows what will slowly rise up next.
They’ve gone heavy on intrusive flashy adverts ahead of the floatation. I think it cheapens the site and ppl are getting bored with it.
I don’t think it’s the ads that make me bored of it. It is all the “like this if you’re against cancer” or “share this picture to win a prize” rubbish that makes it boring.
The idiots have taken over. Text speak and faux outrage are here to stay. Evolution is going backwards.
Cheapens it alright. Only worth about 97 billion now to be fair.
It is worth that as they have 900 million users. That’s big advertising dollars.
The quality of the user doesn’t affect the service. The user is the product that is being sold to advertisers.
I’ve been noticing for a while now that less and less of my friends post anything on Facebook and a good few have told me that they haven’t signed in in ages. I posted something on a friends wall this morning after reading this article as it reminded that Facebook still exists. While it had some relevance to me about a year ago, if it folded tomorrow my life wouldn’t be any the poorer. If none of friends are using it then what’s the point. It appears everyone has moved over to twitter.
Your right its downhill from here..
You will find more and more people leaving facebook. Did it over a year ago myself, best decision i made in a long time.
How do you know your not missing out on something good?
Missing what exactly? 4am drunken status updates? Pictures of babies and dogs? Wacky instagram pictures?
Come on Nuck.
Yes, find myself using it less and less. I spent about 6 months updating everyone with my status about all kinds of rubbish which most people ignore. The thrill of getting a few ‘Like’s’ is wearing thin when it comes to my random thoughts.
Its a bubble exactly the same as the dotcom bubble in the late 90s, on a $90bn valuation FB is valuing each of its customers at $100 in terms of the future revenue they can extract from them but FB doesn’t sell anything and only makes small amounts of revenue on advertising making this ludacris. Just like every bubble its all going to end in tears.
Mike Hunt likes this
Bono will become a billionaire of this would he not?
I’m not quite correct there. His shares are worth quite a lot though.
And that’s a bubble for sure
So every share is worth $1billion and now the company is worth $1,000,000,000,000? For a company that makes diddly squat from advertising
More hype from Facebook, they’ve been dithering about this “magical” flotation since 2010 and it still hasn’t happened yet.
Hey Facebook…Feed the World?
Yes exactly
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