Many people are wondering if Facebook IPO will be worth the price? Mark Zuckerberg baby is set to be valued at $100 billion
Facebook is going to make its debut as a public firm and with this much-anticipated move, the social networking website firm can reach the financial stature of the likes of McDonald’s, Amazon.com and Bank of America.
This Friday the Wall Street Journal reported that Facebook is preparing to file initial paperwork for a public offering that is expected to add as much as $10 billion and take the value of the firm to $75 billion to $100 billion. The filing with the Securities and Exchange Commission is expected to happen this Wednesday or sometime next week. Then the initial public offering of stock would take place in about another three months.
Kevin Landis, chief investment officer at Firsthand Value Technology Fund, which owns Facebook shares, adds, â€œThe real connect-the-dots exercise is to say, youâ€™ve got how many members? What depth of information do you really have about them, how many years will it take to figure out how to fully monetise them.â€
Kathy Smith, Renaissance Capital’s principal predicted, â€œWe are expecting 2012 to be a year of recovery for the IPO market led by the Facebook IPO.â€
eMarketer has been crunching numbers and has come to the conclusion that Facebookâ€™s ad revenue will swell 52% to $5.78 billion this year and will reach $7 billion in 2013. It also added that the firm is expected to grow its share of the U.S. display ad market to about 20%, up four percent from last year. This is above Yahooâ€™s expected share of about 13% and at the top of all the rest. Furthermore, this year Facebook is expected to get hold of 8% of the market as compared to Googleâ€™s 45%.
Facebook was founded by Mark Zuckerberg and his college roommates in 2004 and is debuting on stock markets in its eighth year. Google’s IPO came six years after being founded by Larry Page and Sergey Brin. When Google turned eight in August 2006, its market cap was roughly $116 billion. Today, the company is worth nearly $190 billion – down from a peak of about $235 billion in November 2007.
Speculations are rife and financial analysts are crunching Facebookâ€™s financial data and gauging market conditions to come with various questions and suppositions.
Anupam Palit, senior equity analyst at GreenCrest Capital, said, â€œWhat we really need to look at is whether we are seeing a plateauing of user growth and engagement. Thereâ€™s likely stunning growth right now in emerging markets, but we need to see time spent growing, such as users listening to music, watching movies and buying products.â€
Peter Fenton, an investor with Benchmark Capital, said, â€œWill the revenue per user be [as high as] Googleâ€™s? I have a hard time imagining that. Google has intent-based advertising against search results â€“ thatâ€™s about as good as it gets.â€
Debra Aho Williamson, an analyst at eMarketer, noted, â€œThere’s the general feeling that Facebook might be the future of the way the Internet works.â€
27-year-old founder of the social networking website is said to be worth $17.5 billion by the Forbes magazine. With the signing of the deal, Zuckerberb would come under scrutiny as an entrepreneur. All these figures make this the most anticipated public move of a US firm.
But John Fitzgibbon Jr., publisher of IPOScoop.com, put an end to all the speculations and predictions by pointing out, â€œUntil they actually put the ink on the paper and push it across the desk of the SEC, itâ€™s all speculation.â€