Facebook is planning an initial public offering (IPO) of $10 billion between April and June next year which would value the social network at a huge $100bn.
This is according to sources “familiar with the matter” who have spoken to the Wall Street Journal. Should the IPO go ahead for a figure of $10bn, it will be the largest ever for an internet-based company and make it only the fourth US company ever to float for $10bn or more.
A Facebook IPO has been rumoured for a long time. A floatation usually happens around the time companies break the $100 million revenue barrier, however Facebook is now set to debut with more than $4bn of revenue. A spokesperson for Facebook said: "We're not going to participate in speculation about an IPO.”
Back in May, LinkedIn floated on the stock exchange with its stock more than doubling from the initial share price on the first day of trading, giving the company a value of around $9bn. The stock has since fallen by 36 per cent.
At the beginning of the month, Groupon floated for $805m but its share price has tumbled 42 per cent in the last five days of trading. Sources claim that founder of Facebook Mark Zuckerberg has warmed to the idea of going public, having long been against the idea.
Facebook has even gone so far as to draft a prospectus, which is a document all companies planning an IPO have to file with the Security and Exchange Commission in the US, and which outlines the company's business.
With Facebook currently attracting 500m active users per day, and 800m registered users, the potential for revenue growth is rather large. Indeed Facebook's revenue, driven by its online advertising business is expected to hit almost $3.8bn this year, up from $1.86bn in 2010 - highlighting its growth and potential.
Source: Wall Street Journal