Social-networking leader Facebook filed paperwork on Wednesday for a $5 billion IPO, setting the stage for what will likely be the largest and most-hyped global Internet offering ever.
Social-networking leader Facebook filed paperwork on Wednesday for a $5 billion IPO, paving the way for what will likely be the largest and most-hyped global Internet offering ever. By filing its preliminary prospectus with the Securities and Exchange Commission, Facebook is giving potential investors their first official glimpse into the company's financial vitals.
Silicon Valley and Wall Street have been buzzing about the Facebook offering, hoping it will breathe new life into the IPO and venture capital markets as well as generate tens of millions of dollars in fees for investment banks. Led by co-founder Mark Zuckerberg, Facebook was created in 2004 and has quickly become the world’s largest social network, with more than 800 million users.
Zuckerberg and Facebook management resisted pressure to go public years ago, choosing instead to patiently grow the company’s business model away from the scrutiny of analysts and shareholders. That decision has paid off as private markets now believe Facebook is worth more than $80 billion and some believe its offering will value the company at $100 billion -- more than twice as largest as eBay (EBAY: 32.20, +0.60, +1.91%).
The $5 billion offering is just half of what reports had previously indicated before this week, but would still easily rank as the largest global Internet IPO ever. According to Dealogic, World Online’s $2.8 billion offering in March 2000 holds the record for the largest global Internet-related IPO, while Google’s (GOOG: 580.83, +0.72, +0.12%) 2004 $1.9 billion IPO is the largest in the U.S.
If it raised just $5 billion, Facebook would also trail only Infineon Technologies as the largest global technology IPO on record, Dealogic said. Visa (V: 102.51, +1.87, +1.86%), which raised $19.7 billion in 2008, holds the record for the largest all-time U.S. IPO, but Facebook’s offering would still crack the top 20 and be the largest since General Motors (GM: 24.37, +0.35, +1.46%) in November 2010. While Facebook didn't say which exchange it would list its shares on, it did say its symbol will be "FB."
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