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Will Facebook deliver an IPO surprise?

February 1, 2012
By PALLAVI GOGOI , THE ASSOCIATED PRESS

NEW YORK - Facebook founder Mark Zuckerberg turns up at business conventions in a hoodie. "Cocky" is the word used to describe him most often, after "billionaire." He was Time's person of the year at 26.

So when he takes Facebook public, why would he follow the Wall Street rules?

The company is expected to file as early as Wednesday to sell stock on the open market in what will be the most talked-about initial public offering since Google in 2004, maybe since the go-go 1990s.

Article Photos

AP PHOTO
In this May, 26, 2010 file photo, Facebook CEO Mark Zuckerberg talks about the social network site's new privacy settings in Palo Alto, Calif. When he takes Facebook public, why would he follow the Wall Street rules? The company is expected to file as early as Wednesday to sell stock on the open market in what will be the most talked-about initial public offering since Google in 2004, maybe since the 1990s.

Around the nation, regular investors and IPO watchers are anticipating some kind of twist - perhaps a provision for the 800 million users of Facebook, a company that promotes itself as all about personal connections, to get in on the action.

"Pandemonium is what I expect in terms of demand for this stock," says Scott Sweet, senior managing partner at IPO Boutique, an advisory firm. "I don't think Wall Street would want to anger Facebook users."

The most successful young technology companies have a history of doing things differently. Google's IPO prospectus contained a letter from its founders to investors that said the company believed in the motto "Don't be evil."

Facebook declined to comment, but Reena Aggarwal, a finance professor who has studied IPOs at Georgetown University's McDonough School of Business, believes Zuckerberg will emulate Google's philosophy, at least in principle.

Founders Larry Page and Sergey Brin wanted an IPO accessible to all investors, and said so in their first regulatory filing. Facebook may say something similar when it files to declare its intention to sell stock publicly.

Facebook is expected to raise as much as $10 billion, which will value the company at $75 billion to $100 billion, making it one of the largest IPOs. A stock usually starts trading three to four months after the filing.

The highly anticipated filing will reveal how much Facebook intends to raise from the stock market, what it plans to do with the money and details on its own financial performance and future growth prospects.

 
 

 

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