Financial news channel CNBC reported on Monday that a Facebook IPO will likely be filed by October or November and that the social networking site could be valued at more than $100 billion.
Goldman Sachs Will Probably be the Lead Underwriter
According to CNBC Goldman Sachs seems favored as the leading underwriter for the lucrative offering, which could come as soon as the first quarter of 2012. It comes as no surprise that a Facebook IPO is in the works as their chief operating officer last month called an IPO “inevitable”.
However, the evaluation of $100 billion has some financial analysts shaking their heads in disbelief. While Facebook is tremendously popular as a social networking site, and continues to add members at an astonishing rate, a $100 billion market evaluation for a company started only seven years ago in a Harvard University dorm room seems awfully rich.
The Facebook IPO will undoubtedly attract great interest on the part of investors. For one thing, reportedly Facebook now has more than 600 million members and is still growing exponentially. The content for Facebook is generated by the members themselves and includes the ability to chat with friends, the ability to upload and share photographs, to find new “friends”, to post to your own “wall”, and in general to share your life and communicate with others who may be scattered about the world.
Facebook is a Social networking Powerhouse
Those who have Facebook accounts will probably understand that the use of Facebook can be quite addictive. With over 600 million members sharing information about themselves, their travels, their locations, their likes, their dreams, their parties, and their aspirations, there is a constant flow of information that many members feel they must contribute to and make an important part of their lives.
Facebook founder and principal shareholder, CEO Mark Zuckerberg, was very shrewd in building Facebook membership before monetizing the business model. Until recently advertising was not accepted on the site. Now that he has such a large base of members advertising on Facebook is a marketers dream and is now producing a growing stream of income for Facebook.
The Facebook IPO will make a lot of money for early pre-IPO investors and employees. If the company is evaluated at $100 billion at the time of the IPO once again there will be huge celebrations in California.