Facebook’s long-awaited IPOis finally around the corner.
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Mark Zuckerberg
The company may file its S-1 with the SEC as early as Wednesday, the Wall Street Journal just reported.
CNBC’s Kayla Tausche has reported that the company’s looking at a valuation between $75 billion to $100 billion, likely in the $80 billion range, and Morgan Stanley is likely to lead the IPO, while Goldman Sachs is likely also involved.
What’s Facebook worth?We’ll see what the S-1 reveals, but sources tell me that the company’s expected to earn about $3.8 billion in 2011 full-year revenue and roughly $1.5 billion in operating profits.
Why the caution? Last year Groupon put its IPO on hold after the company drew SEC scrutiny for a number of issues. A memo by CEO Andrew Mason discussed revenue growth and his confidence in the business. The company also faced a slew of questions about how it accounted for its revenue.
Why would Facebook file now?
Bottom line: it wants to bake in plenty of extra time so it can start trading by the end of May, before the summer trading lull. The company is required to disclose financial by the end of the quarter in order to comply to the so-called “500 shareholder rule.” The law requires companies to disclose their financial information by the end of the first quarter the year after the company topped 500 shareholders.
But instead of waiting, sources tell me that Facebook is building in plenty of time for back-and-forth with the SEC because it expects to be the subject of intense scrutiny. As the poster child for the Internet era and the largest IPO in years, my sources say Facebook is going to conduct itself with the utmost caution. One source even said that the company wouldn’t be surprised if the SEC tried to make an example of Facebook and used the company’s filing to make new laws about disclosures and the like.
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