Facebook Looking to Make Big Money With IPO

For months now, we have been hearing about the clout that Facebook is going to be carrying once they finally release their Initial Public Offering (IPO). It now appears that those particular expectations were a little muted, especially when it comes to the actual value the company would carry once their IPO was sold off. Filing papers on May 3rd, Facebook took another step towards going public and the numbers now show that the company could be valued anywhere from $77 to $96 billion when the smoke clears.

The company has officially stated that it will sell 335 million shares and that the stock will be priced at $28-$35 a share. If those numbers are accurate, it would mean that Facebook’s IPO would be the biggest an internet company has seen since Google went public back in 2004. The company will now begin to the dusty trail on what is usually referred to as a “roadshow” where higher-ups will meet with various high-powered executives who are considering buying up large amounts of stock. The executives will have a series of question and answer sessions with Mark Zuckerberg and the top-of-the-ladder members of Facebook’s management team. While the process is named an Initial Public Offering, these sessions are very far from being open to the public. Invitations are the only way to get in the door, and having millions of dollars is the only way to get an invitation.

Reuters is reporting that the tour will begin shortly, though the company is supposed to keep quiet about it until the SEC signs off. That means that at the moment, the social media giant cannot say who will be going out on this roadshow, but it would seem to be major mistake to not include Zuckerberg. While the genius creator of this mega social site is rumored to have a prickly personality that could turn people off in a one-on-one situation, the heavy investors are going to want to meet the man responsible for all of this. Many industry insiders often cast these roadshows as little more than celebrity meet and greets. In the case of Facebook, which was a completely unique idea when it was launched, people with deep pockets are going to want to see the man behind it.

Facebook is the undisputed king of social media sites, still outpacing Twitter and Google+ by a wide margin, the questions that appear to be the most important to the stock market insiders is whether or not Facebook is really worth the money it stands to make. There are plenty of people on Wall Street who remember the last tech bubble bursting. Zuckerberg and the rest of his Facebook managers should expect to get grilled as to why the shares should open with such a high price tag. Of course, Facebook can counter with the ridiculous numbers of subscribers (somewhere around 800 million Worldwide) and then point to the fact that they are gaining more every day. Businesses have already seen the value of using Facebook to reel in their own profits; it seems likely that in the end, the social media site won’t have any problems convincing investors of its worth.

Guest article written by: Bo Vandy has been freelance writer covering the tech sector for over four years. In that time he’s covered everything from Android to Apple … Facebook to Twitter. He contibutes to several sites including DegreeJungle a college resource.

10 thoughts on “Facebook Looking to Make Big Money With IPO”

  1. this is a big step for facebook, they have the advantage for it because when we are talking about IPO we are dealing it all with money.

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  2. After this procedure finishes, we’ll be able to compute the market value of Facebook. Afterwards, when the shares will be publicly traded, everyone will be able to buy a stake of Facebook. This is an interesting procedure, therefore I wonder how it will end up.

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  3. Yes you are right, I also think that Facebook may make big money by IPO but it depends upon share and people interests.

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  4. Everyone is speaking about Facebook’s IPO and how one should invest in such. But one might be wise not to invest to big due to the fact that there is still only mostly speculation going on , and is not to say that you will find this a well-worth-investment for your business.

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  6. We all agree that Facebook IPO was overrated but invest in it could be a good deal. The important will be to understand the right moment to disinvest (within 3 years, i would say). Thanks for you nice post!

    Reply
  7. Hey, I never heard of this story before I’m glad you shared it here. It is suprising that Facebook will now go to Initial public offering (IPO) for $28-$35/share. I think it’s fair enough. I think Mark is really a cool person that revolutionalized the social networking world.

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  8. Facebook is big now but I think it’s only a matter of time until Google takes over.

    one of two things will happen, either Google is going to buy Facebook or they will release something that’s even better then Google+ and takes over Facebook.

    Reply

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