Facebook, the social networking site, has announced plans for a major stock market flotation, seeking to raise $5 billion. This valuation is less than business commentators had previously estimated.
The BBC reports that when the shares go on sale this will be the biggest stock market sale by an Internet site. The amount of capital being raised is far lower than analysts, like Venture Village, predicted a couple of days ago when sums of $100 billion were being mooted (which would have made Facebook the same value as companies like Amazon and McDonalds).
Facebook has over 800 million users worldwide. The Irish Examiner explains that the shares will go on sale as what is termed an Initial Public Offering, which will mean that those with Facebook accounts, who can afford to buy shares, can do so.
At the moment Facebook earns most of its money from advertising. In launching their share bid, Mark Zuckerberg is quoted by The Guardian, as saying: "We're going public for our employees and our investors. We made a commitment to them when we gave them equity that we'd work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment. As we become a public company, we're making a similar commitment to our new investors and we will work just as hard to fulfill it."
Facebook was founded by founded by Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz and Chris Hughes. In 2010 it was the subject of a hit movie called "The Social Network", which was directed by David Fincher.