Facebook Planning A $10 Billion IPO-Do You Need To Wait For The Facebook IPO?
Douglas MacMillan and Brian Womack said in a recent article published on Businessweek.com that Facebook was planning an Initial Public Offering (IPO) of $10 billion. $10 billion IPO means that Facebook, a social networking site considers its value to be around $100 billion. A $10 billion IPO would put the Facebook IPO as the biggest technology IPO dwarfing the amount of the previous record holders like Infineon Technologies AG, which generated $5.23 billion in its 1999 debut.
Facebook is currently pegged at $66.6 billion on SharesPost Inc., which handles trading of closely held companies. According to this Businessweek.com article, Facebook plans to go for the IPO somewhere in 2012 so that CEO Mark Zuckerberg gets more time to gain users and boost sales. Facebook may file for the IPO by the end of this year. The $100 billion valuation of Facebook would be twice as high as it was in January when the company announced a $1.5 billion investment from Goldman Sachs Group Inc and other backers at a worth of $50 billion.
The problem with these social networking IPOs is that novice investors tend to put too high a valuation on the social networking companies. Valuing Facebook at $100 billion makes it more valuable than Disney ($61 billion market cap), Amazon.com ($88.3 billion market cap), and Cisco ($96.8 billion market cap). It would also dwarf Google's $23 billion valuation at IPO and eBay's $2 billion valuation at IPO. Social networking IPOs may not be the safest stocks to own and unless you’re Goldman Sachs or have friends in high places, you can just forget about getting pre IPO shares. You'll have to wait and jump in on the Facebook buying rush on the day of IPO.
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