Facebook Inc., owner of the world's most popular social networking site, is expected to file a preliminary prospectus for a $5 billion initial public offering Wednesday morning and has selected Morgan Stanley as the lead bookrunner to handle the IPO, International Financing Review reported Tuesday, citing sources close to the deal.
Although the $5 billion figure is far smaller than had been previously reported, it could be ramped up based on demand, IFR said.
According to IFR, Facebook has opted to hire five bookrunners, featuring Morgan Stanley in the coveted lead left role, IFR reported. Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan are expected to be the other bookrunners, though the syndicate could also grow, IFR quoted the sources as saying.
The filing timetable suggests Facebook will finalize the IPO process by May, pending a smooth registration process with the U.S. the Securities and Exchange Commission, IFR reported.
The Facebook IPO is one of the most highly-anticipated ones in recent times, creating a lot of investor curiosity and media speculations.
Facebook, which was co-founded by its CEO Mark Zuckerberg in 2004 in a dorm room at the Harvard University, currently has more than 800 million members around the globe, with about 500 million of them logging in every day. The company is currently valued in private markets at around $83 billion.
Facebook members can create their own profiles in the site; post their status (views), photos and videos; chat with friends, etc. The company expects to reach the magic number of 1 billion this year itself. The IPO will help Facebook to amass enough fund to keep up with its current expansion path.
Facebook had raised its first round of venture capital funding of $12.7 million from Accel Partners in May 2005, with other high profile investors such as Microsoft Corp., and Goldman Sachs Group Inc. following. Yahoo even offered up to $1 billion to buy Facebook in September 2006.
Last year, the U.S. market saw a flurry of IPOs from social-media internet companies. In May 2011, professional networking site Linkedln Corp. held a highly successful offering, and was followed by slew of internet companies, including Pandora Media Inc., Renren Inc. daily-deal site Groupon Inc., and Zillow Inc.
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