Facebook will list for an IPO next month and could go public as early as the first half of 2012, several new reports have alleged.
The reports suggest founder and chief executive Mark Zuckerberg has been telling staff the social networking giant will list soon, in a sign the company is ramping up its plans to pay off its original investors and employee stockholders.
The latest rumour mill was sparked by LinkedIn founder and Facebook investor Reid Hoffman, who told the Sunday Telegraph that he believed Zuckerberg would go public as early as next year.
“Going public would benefit Facebook in lots of ways – namely having public currency to do acquisitions. So Mark [Zuckerberg] might as well get the benefit as well as the cost. Given that logic – I would suspect that some time in the first half of next year, he will engage in the IPO process.”
Facebook has reportedly been under scrutiny from the Securities and Exchange Commission, as laws in the United States dictate a company must start disclosing financials after it accumulates more than 500 investors. A recent funding round led by Goldman Sachs has brought Facebook near that point, reports suggest.
But TechCrunch has reported a different angle, suggesting Facebook will list next year due to pressure from its original employees, who have held on to a significant amount of stock for years. That pressure has grown even greater as Zuckerberg and other executives have downplayed the idea of a listing.
However, although Facebook has restricted some employees from selling stock, many shares have already been sold on secondary markets.
The latest report from Business Insider suggests Zuckerberg has been letting workers know the listing could come sooner than expected, with an S1 filing to come next month.
“The IPO talk inside Facebook has ramped up the past six weeks and Zuckerberg repeatedly has said that it is ‘coming,’ which he’s never said in the history of Facebook,” a source told the publication.
However, the same article suggests Facebook has not decided on underwriters, which must occur before the S1 is filed.
Facebook has enjoyed a number of valuations in its seven-year history, with the most recent suggesting it could be worth as much as $US50 billion, although sales on secondary markets suggest that could be closer to $US80 billion.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
