Facebook IPO on Wednesday?

David Heath
Saturday, 28 January 2012 18:49

IT Industry - Listed Tech

Circle the wagons, folks.  If you believe the hype-makers, it will be the end of the world as we know it when the widely rumoured Facebook IPO hits the streets on Wednesday February 1st.  Or will it?

 

If you believe all the rumours (and who wouldn't?), Facebook's long-anticipated IPO could be announced on Wednesday this coming week.

If, as expected, the transaction is for 10% of the company for $US10B, this would make a large number of millionaires within the company and value each and every one of the 800 million users at $125.

While not being able to speak for other iTWire writers or for any of our readers, they'd have to price every advertisement on the site at about $10 (each) to recoup their investment in this particular writer's Facebook page.  Hopefully there are others who would make up for my paltry efforts.

About the only remaining debate is who will be the lead investment advisor, although Wall Street Journal reports even that has been decided.  Following their major faux pas in attempting to place Facebook private shares with a large number of their clients (and getting a serious SEC rebuke from the SEC for their efforts), Goldman Sachs has now taken a back seat to Morgan Stanley in this race.

Regulatory pressure for the IPO comes from the fact that any US company with in excess of 500 shareholders must act as if it were a public company.  This action must occur within 120 days of the end of the fiscal year in which the shareholder limit is exceeded.  Facebook's fiscal year ended on December 31st.  Given that an IPO takes around three months to complete after the initial paperwork is filed with the SEC, February 1st makes some sense - giving the company until May 1st to issue the shares.