A Billion Dollars Isn't Cool. You Know What's Cool? Facebook's Possible $100 Billion IPO Valuation

There have been rumblings of Mark Zuckerberg making Facebook a publicly traded company for some time, but new information seems to point toward the possibility of a whopping $100 billion initial public offering (IPO) valuation. Such a valuation could raise huge amounts of money for the company, founded barely seven years ago when Zuckerberg was at Harvard. Those events have already been immortalized in film, and Facebook’s continuing struggles with privacy are the stuff of Internet legend, but a massive IPO would almost certainly open a new chapter for the social networking giant.

According to the Wall Street Journal, Facebook could be angling for an IPO between April and June of next year. Facebook’s official channels have remained tight-lipped about any such plan, and Zuckerberg has famously seemed cool to the idea. However, WSJ’s “people familiar with the matter” seem to think otherwise. They claim that Facebook has already written its own prospectus, a key first step in becoming a publicly traded company.

Going public does have its downsides, of course. Sure, your company gets lots of money — in Facebook’s case, possibly $10 billion —  but it also means being beholden to investors and making financial information public. Both of these seem likely to rankle the somewhat notoriously independent-minded Zuckerberg.

Another possible downside could be the recent dissatisfaction with new tech companies going public. Groupon and LinkedIn both saw massive IPO valuations which saw equally massive losses once the stock was on the market. With all the talk of a second tech bubble, Facebook could be a knight in shining armor if its IPO went well, perhaps bolstering confidence in other tech companies, or just another middling stock market newcomer.

Should Facebook go public with a $100 billion valuation and successfully raise $10 billion in the process, it would be amongst the largest public offerings in history. From the WSJ:

Only 13 IPOs have ever been completed with a value greater than $10 billion, and just three of those have been for U.S. companies, according to Dealogic, which tracks new securities issues. The only U.S. issuers at that size level have been Visa Inc. at $19.7 billion in 2008; General Motors Co. at $18.1 billion in 2010; and AT&T Wireless Services Inc. at $10.6 billion in 2000.

The WSJ goes on to note that Google’s 2004 IPO valued the company at $23 billion, and it has gone down as the largest U.S. Internet IPO in history.

One thing is certain amidst all this speculation: Facebook is making a lot of money, and people are keen to get a slice of it. If and when that happens will just have to remain the fever dreams of Harvard business students for now.

(via WSJ)

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Max Eddy