In 2011, the tech world saw some significant companies go public. Many wondered if companies like Pandora, Groupon, Zynga, RenRen, LinkedIn, HomeAway, Angie’s List, and Demand Media signaled that the tech boom had finally seen its second revival. Of course we all remember the tech bubble bursting a few years ago, but with signs pointing to more public offerings soon, what could this mean for the industry? TheStreet reports that just last year, there were 44 tech companies that had an IPO, nearly double the offerings from all other sectors, but there are still many more being planned for 2012 — albeit only a few may have the same values and predicted price tag as last year. In fact, four out of the five Internet companies to have gone public came out of last year’s class. But here in 2012, perhaps the most widely anticipated and watched will be Facebook.
For the past couple of years, the community, investors, and the industry have been cautiously watching the social network to see whether it would go public. After all, it seemed only logical since Facebook appears to be too large of an entity to be acquired. And now, just this week, signs are once again pointing towards Facebook finally getting ready to file for it’s Initial Public Offering (IPO). Analysts are predicting that once the IPO is filed and Facebook does indeed go public, it could easily vault into being one of the largest public companies in the world, joining the ranks of McDonald’s, Amazon.com, and Bank of America. In fact, the Wall Street Journal is reporting that the valuation is already being estimated at somewhere between $75 to $100 billion.
Will people start to buy into Facebook? Most likely since it’s one of the hottest startups to go public this year and still looks to have some steam for the next few. eMarketer has reported that Facebook’s revenue has increased over the past three years, all without going public. In 2011, they generated nearly $4.27 billion, more than double the $2 billion they made in 2010. In 2012, they are estimated to increase that more, this time to $5.78 billion. The numbers just keep on going for them, and with those increased revenues, so do the number of users on the site. In 2011, Facebook reported that they have over 750 million users — with more companies starting to extend their business to the site, how many more users will there be by the end of the year? Probably over 1 billion.
Are the stars in alignment for Facebook to go public? Reports are that private trading has been suspended on secondary markets and in a Bloomberg interview, an analyst guessed that this was because it was paving the way for the IPO. The rationale, as reported by Mashable, by Sam Hamadeh, CEO of PrivCo: “Facebook and companies who do this don’t want to expose themselves to lawsuits related to the fact that some people had it before others and were able to trade on it…” Another hint for the filing is something that Fortune magazine reported earlier that Facebook Chief Operating Officer Sheryl Sandberg is set to give a keynote speech at Harvard Business School in May. They theorize that it would be unusual for Ms. Sandberg to give a public talk while Facebook is undergoing its filing, but with her speaking at Davos on Sunday and next at Harvard in May, perhaps now is the time when Facebook would want to implement the SEC-mandated quiet period restrictions? Whatever the intent, it has gotten people’s attention and made eager investors more riled up and eager to buy a piece of the social network.
Who knows what will happen this Wednesday as this is all still just a rumor. But aside from Apple rumors, Facebook’s IPO is one of those things in the tech industry that just has everyone chomping at the bits eager with anticipation. Below is a video from Mashable on everything you need to know about the impending filing.
Update: The New York Post has published that both the New York Stock Exchange and the NASDAQ are apparently battling for the prized listing for Facebook. There’s even speculation that they have reserved $FB as their stock ticker that can be used on both exchanges. The article mentions that these exchanges feel Facebook would add some “much-needed panache” to help beef up any tech “street cred”.
Photo Credit: Laughing Squid