Facebook plans early 2012 IPO, say sources
Facebook is reportedly set to go public in early 2012, becoming the latest company to cash in on what seems to be a renewed frenzy surrounding technology stocks. Likely to be one of the hottest IPOs so far, experts believe that the company could reach a valuation of $100 billion.
A recent private sale of a large chunk of shares -- about 100,000 -- gave a valuation of about $85 billion. An IPO and the surrounding buzz would push the valuation even higher, experts believe. The news follows Groupon, which announced its IPO earlier this month, and LinkedIn, which started trading publicly last month.
CNBC reported on the news Monday, saying that pressure was mounting within the company to offer stock on the public market. While Facebook does offer shares in the company internally, financial regulations limit how these employees can sell their private shares publicly.
The company is waiting to go public due to the fact that it is approaching a threshold set by the Securities and Exchange Commission. When a company has more than 500 private investors, it is required to release financial data publicly.
No doubt, at that point it just would make sense for Facebook -- or any other company for that matter -- to just go public. The social networking site expects to reach that threshold by the end of the year, sources told the financial television network.
With Facebook now seemingly moving forward with its plans to go public, the only other major web property left is Twitter. Many experts believe that will also happen within the next year or so. But the microblogging site may be waiting to feel out the market, too.
Recent data on the economy has not been too promising, fueling fears of a double-dip recession or worse. Add to this the "bubble" feel of the rush among technology companies to seek public investment, and going public may not seem as good of an idea as some would believe.