Facebook looks to friend Wall St with huge IPO

NEW YORK: Facebook is poised to find out just how much Wall Street likes the world's number one social network.

Facebook is expected to file paperwork towards a stock market launch this week, possibly as early as Wednesday, seeking to raise up to $10 billion on the advertising riches flowing from the personal data of its 800 million users.

The flotation would be the largest ever by a technology company, eclipsing the $1.9 billion raised by Internet search giant Google when it went public in 2004 at a valuation of $23 billion.

The Wall Street Journal broke the news of Facebook's impending initial public offering (IPO) last week, saying it planned to raise $10 billion, which would value the firm at between $75 billion and $100 billion.

The $10 billion target had been halved to a more conservative $5 billion in reports emerging late Tuesday in The New York Times and International Financing Review.

The publications stressed, however, that $5 billion was only a preliminary fund-raising target and could always be raised after gauging investor interest in the Palo Alto, California-based company.

With 800 million members and more joining daily since its launch in 2004, Facebook is the leading social network in all but seven countries, notably Russia, where local rivals are preferred, and China, where it is banned.

The initial IPO filing with the US Securities and Exchange Commission was not expected to specify how many shares were being offered or their list price.

It would also not put a valuation on the company nor identify which exchange Facebook shares would be traded on -- the Nasdaq stock market or the New York Stock Exchange.

But it would provide the first glimpse ever of the financial details of the globally popular service launched by chief executive Mark Zuckerberg eight years ago from his Harvard University dormitory room.

According to eMarketer, Facebook's total revenue was $4.27 billion last year, mostly from online advertising, up from $2 billion in 2010.

The filing should also reveal the holdings of shareholders in Facebook, company strategy and risk factors going forward such as recurring privacy complaints that have bedeviled the company over the years.

Zuckerberg, whose network has been estimated at $17.5 billion by Forbes magazine, is believed to be the largest individual shareholder in Facebook with 24 percent.

Facebook shares would not begin trading until the IPO process is finalized, probably not before May, and the filing may not reveal the ticker symbol Facebook plans to use on Wall Street.

With a deal size of $10 billion, Facebook would slip into sixth place on the list of largest US IPOs between AT&T Wireless Group ($10.62 billion) and Kraft Foods ($8.68 billion), according to Renaissance Capital.

A market capitalization of $100 billion would put Facebook on a par with McDonald's ($101 billion), well ahead of Boeing ($55 billion) but behind Apple ($426 billion) and Google ($189 billion).

A Facebook IPO would be "the biggest financial event in the tech industry for 2012," Forrester Research analyst Josh Bernoff said, and would eclipse those of several other Internet companies that went public in 2011.

Career-oriented social network LinkedIn was undervalued while online daily deals site Groupon and social games titan Zynga have both been trading at or below their list price.

Morgan Stanley is expected to be the lead bank for the IPO and International Financing Review said Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital and JP Morgan would also play a role. (AFP)