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Facebook Files For IPO

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2/1/2012 6:11 PM ET
(RTTNews) - Ending all curiosities and speculations, Facebook Inc., owner of the world's most popular social networking site, on Wednesday filed an S-1 registration statement with the U.S. Securities and Exchange Commission for an initial public offering.

Menlo Park, California-based Facebook said in the filing that it and some selling shareholders will sell shares of the company's Class A common stock in the offering. The proposed maximum aggregate offering price is $5 billion, a figure that is estimated solely for the purpose of calculating the registration fee.

The value is much less than many earlier reports suggested, but could go up when the offering is priced amid strong investor demand.

The company has two classes of authorized common stock, Class A common stock and Class B common stock. Each share of Class A common stock is entitled to one vote per share, while each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock. The company said it plans to list its Class A common stock under the ticker symbol "FB", but did not provide the name of the exchange where it plans to list its shares.

Morgan Stanley, JPMorgan Chase, Goldman Sachs & Co., Bank of America-Merrill Lynch, Barclays Capital and Allen & Co. LLC are the underwriters for the offering.

Facebook was co-founded by its CEO Mark Zuckerberg in 2004 in a dorm room at the Harvard University. People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about. Facebook members can create their own profiles in the site; post their status (views), photos and videos; chat with friends, etc.

Facebook has witnessed phenomenal growth in the last few years. It had 845 million most active users worldwide as of December 31, 2011, an increase of 39% from 608 million a year ago.

For the year ended December 31, 2011, the company generated revenue of $3.71 billion, up from $1.97 billion in 2010 and $777 million in 2009. Net income attributable to Class A and Class B common stockholders also jumped to $668 million in 2011 from $372 million in 2010 and $122 million in 2009.

The company is currently valued in private markets at around $83 billion.

The Facebook IPO is one of the most highly-anticipated ones in recent times, creating a lot of investor frenzy and media speculations. It would surpass Google Inc.'s 2004 offering, which has held the record for the largest U.S. Internet IPO by raising $1.9 billion and valuing the company at $23 billion. 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.