Facebook filed its IPO papers with the SEC today, and the social network is expected to debut on the stock exchange in three to four months. The filing reveals Facebook is seeking to raise $5 billion.
But those close to the company say that Facebook is "aiming for a far greater offering that would value it near $100 billion," The New York Timeswrites.
The offering is expected to be the largest for an online company, dwarfing Google's $1.9-billion IPO in 2004. As the New York Timeswrites. "Trading of the stock is expected to begin by late May, the people briefed on the matter said."
The Wall Street firms underwriting the Initial Public Offering are Morgan Stanley, JPMorgan Chase, Goldman Sachs, Bank of America-Merrill Lynch, Barclays Capital and Allen & Company.
"There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future," said Mark Zuckerberg, Facebook's CEO, in a letter that accompanied the filing. "The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on. We hope to strengthen how people relate to each other."
Going public will not only shake Silicon Valley to its core but also provide an intimate look at Facebook's financials and company strategy. Carlos Kirjner, an analyst at Sanford Bernstein, told CNET: "Everyone is looking forward to learning more about the specifics of the business in an attempt to understand how Facebook will have an impact on the Internet."
Facebook was started by Mark Zuckerberg, now 27, while he was a student at Harvard in 2004. Today, the social network enjoys a membership of 845 million people, the filing stated, and revenue grew 88 percent from 2010 to 2011. According to the filing, Facebook pulled in $3.7 billion in 2011 compared to $1.97 billion in 2010.
Facebook S1 filing
Facebook financials disclosed as part of its filing for an IPO
Click on the image for a larger preview
Despite bringing in billions in revenue, reports indicate Facebook seems to make a small sum on a per-user basis. In 2011, Facebook made a little more than $1 per user.
CNET notes every S-1 includes a section on risks to shareholders. "Those risks could contain commentary on competitors, including Google's rival network, Google+, as well as other areas where the company may run into hurdles."
Some are calling the IPO an American milestone, such as former Treasury secretary Lawrence H. Summers. He told the New York Times: "Many companies provide products that let people do things they’ve done before in better ways. Most important companies, like Ford in its day or I.B.M. in its, are those that open up whole new capabilities and permit whole new connections. Facebook is such a company."
The SEC filing shows Zuckerberg asked to have his salary reduced to $1 per year starting January 2013. Zuckerberg is widely referred to as the world's youngest billionaire, and more than 1,000 Facebook employees are expected to become millionaires with the company's IPO.
Forbes writes a Facebook IPO can revitalize the tech industry. "If Facebook could lift the concerns by the general public that tech is not in a bubble, entrepreneurs and investors feel that a real tech boom is here to stay," the author states.
See the S-1 filing here, and Mark Zuckerberg's letter here.