Post date: Feb 01, 2012 11:8:33 PM
The social networking site, founded by Mark Zuckerberg in a Harvard dorm room in 2004, picked Morgan Stanley to take the lead role in what is expected to be the largest IPO ever to emerge from Silicon Valley.The $5 billion is a preliminary target and could be ramped up in coming months in response to investor demand.
The author of "The Facebook Effect" comments as social networking site Facebook files for what could be largest Silicon Valley initial public offering (IPO) ever.
INTERNET (FACEBOOK.COM) - Facebook filed for a $5 billion (USD) initial public offering Wednesday (February 1), submitting preliminary paperwork to the U.S. Securities and Exchange Commission. The hotly anticipated filing means Facebook shares could begin trading in several months.
The other four bookrunners chosen were Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan.
The preliminary IPO filing sets the stage for a May market of the world's largest social network, The coming-out party could dwarf almost any before that, including Google Inc's $2 billion IPO.
David Kirkpatrick, author of "The Facebook Effect", shared his thoughts on Facebook's move to go public. He says he's not surprised that Facebook went about it this way.
"It's always been extremely important to Mark Zuckerberg to remain independent. He turned down repeated offers to buy the company, from Yahoo, from Microsoft, from News Corp, from MTV. Never was he interested and he's not interested now. He wants independence to run Facebook the way he believes it should be run and I think the IPO in that sense is an assistant to his goal in that he will have his valuation. It will be much harder for someone to acquire him once he's proven by the stock market to be worth a 100 billion dollars," he said.
Kirkpatrick's book documents the social network's rise from Harvard dorm room to the world's most popular social network, which at last count boasted 800 million members globally.
Kirkpatrick says the $100 billion valuation is just the beginning.
"I also predicted elsewhere that Facebook would be worth at least 200 billion sometime in the next couple of years, probably in the next two years because it's just such a fast growing company with such an extraordinary devoted base of users and investors are obsessed with it," he said.
One country lacking Facebook "friends" is China, where it remains banned. Kirkpatrick, who spoke to Reuters from China, says Facebook needs to gain entrance to the country that has more internet users than any other.
"I think Zuckerberg knows that he has to have China if he's going to be a truly global internet service and as a result he will do everything he can to bring Facebook in here. I don't think he wants to give up too much control. The question will be how little control does he have to give up in order to operate in China. But I think he will give up certain control."
Another social networking site, Linkedin, went public last May. And messaging site, Twitter, remains privately held.