14 DAY TRIAL // Dizzying valuations for Facebook are no longer much of a surprise. The company seems to be adding tens of billions in theoretical value every week or so. The latest figure, which actually looks conservative, pegs Facebook at over $100 billion when it will eventually go public, early next year.
According to CNBC, citing the ubiquitous "people familiar with the matter," the company is looking for an IPO in the first quarter of 2012 at a valuation north of $100 billion.
Confirmation from internal sources is great, but it's hardly a surprise to anyone following Facebook's financial evolution. The company pretty much confirmed the deal earlier this year when it closed its biggest funding round yet, of $1.5 billion.
At the time, Facebook said that it will likely have over 500 investors by the end of the year, which means that it will have to start issuing public financial reports, under current US regulations.
And if it starts revealing its revenue, profit and so on, it might as well go public and benefit from it. Since then, Facebook's top people have also talked about an impending IPO, though they haven't provided any actual details.
One thing that's new in the latest report is the valuation, of over $100 billion. That's certainly a huge sum, companies usually file for an IPO way before reaching these numbers.
But Facebook shares are already trading at over $80 billion in the secondary markets, so $100 billion three quarters from now seems fairly conservative. Most likely, those involved want to keep expectations low, for the time being.
Facebook doesn't need to go public, with $1.5 billion in funding in just the latest round and profits reaching $2 billion Ebitda in 2011, it doesn't need the money.
But it will have to, not only because it's going over the 500 investors mark, early employees which own millions-worth of Facebook shares want to be able to cash them in, especially since it is said that Facebook has cracked down on secondary market transactions.