Facebook IPO May Happen Before Year-End
With more competitors entering the marketplace, it is likely that Facebook has identified a window of opportunity that it does not want to let slip by, prompting it to reconsider going public sooner than planned. With the valuation of $100 billion being double the valuation of the company in January of this year, it appears that Facebook anticipates investors will snap up IPO shares. If the figure of $10 billion proves to be correct, the Facebook IPO would be the largest in the US tech sector’s history.
Despite issues over privacy, Facebook reportedly has more than 800 million users. Working on the company being valued at $100 billion, each Facebook user is worth $125 dollars. Facebook founder Mark Zuckerberg has readily admitted that the social media site had made some mistakes with regard to privacy issues, a matter which was highlighted by the US Federal Trade Commission (FTC) on behalf of complainants, leading to a number of changes by the company.
Following LinkedIn’s much-publicized IPO, other smaller social media companies have also gone public, with some failing to live up to expectations. LinkedIn is still trading above its IPO price, but both Groupon and Pandora Media are trading below their IPO prices, tempering enthusiasm for publicly-traded social media entities. As Facebook is selling a service and is reliant on advertisers for revenue, whether investors do indeed snap up IPO shares remains to be seen.