Share sale of $10bn could value social site Facebook at $100bn
THE flotation of Facebook moved a step closer yesterday, amid reports the social network is planning to go public next year.
Mark Zuckerberg's company is thought to be considering raising $10bn (€7.5bn) -- the most ever for a tech company -- in an initial public offering (IPO) that would value the company at $100bn.
The company, which has its international headquarters in Dublin, may file for the IPO before the end of the year, although the exact timing hasn't been hammered out yet.
The valuation would be twice as high as it was in January, when the company announced a $1.5bn investment from Goldman Sachs and other backers.
The IPO is far enough away that the details may change, said Lise Buyer, principal of the Class V Group, an IPO advisory firm.
"It's far too early to accurately predict where the valuation will be on deal day," Buyer said.
Facebook expects to be required by US regulators to disclose financial results by April 30 next year if it doesn't go public by then, the company said in January. It is believed to be waiting until 2012 to give Zuckerberg more time to gain users and boost sales.
Facebook's revenue will more than double to $4.27bn this year, research firm EMarketer said in September.
At $100bn, Facebook would be worth 23 times that projected revenue, signaling the company expects its faster growth rate to justify a premium valuation over rivals.
Google trades at 6.5 times projected current-year revenue, Apple is worth 2.6 times sales and the multiple for Microsoft is 2.8m.
The valuation Facebook is seeking would place it between PepsiCo which is worth $98.5bn, and Verizon Communications at $102.6bn. Apple is the world's most valuable technology company at $349.6bn.
Facebook's valuation is currently pegged at $66.6bn by SharesPost, which handles trading of privately held firms. (Additional reporting by Bloomberg)