Facebook Targets May 17th For IPO Date with a $104 Billion Valuation

According to multiple sources close to the company, Facebook wants to schedule its initial public offer on May 17.

A plenty of rumors claimed that the company was going to hit NASDAQ during the third week of May. Photo: Spencer E Holtaway/Flickr

Social networking site Facebook is allegedly targeting May 17 as the potential date for its initial public offering, according to a TechCrunch report that cites some sources close to the company.

CNBC claimed a week ago: “Facebook has homed in on two possible dates to launch its initial public offering on the Nasdaq, according to a person familiar with the matter.”

It continued: “Bankers & management are currently looking at a primary target date of May 16 or May 17 to price the deal (with trading commencing the following day), according to this person, and trading would commence the following morning.  The company would begin marketing the deal on May 7 under that scenario.”

As other sources revealed, Facebook will be estimated at around $100 billion, reflecting current levels of trading in the secondary markets (and avoiding SEC scrutiny). However, there are also claims that the company plans to raise $10 billion at a $100 billion valuation.

“Investors want as high a price as possible so that the secondary market won’t look like a problem,” said one of the sources. With 2.51 billion fully-diluted shares outstanding, the valuation desired would price the company at around $40 a share.

The IPO date might be off depending on how much time federal regulators need to review Facebook’s recent $1 billion acquisition of mobile-photo-sharing startup Instagram. Reports revealed that in order to win over Instagram, Facebook was forced to show its hand.

Facebook bought the photo-sharing service for $1 billion in early April. According to the deal the social network giant was to pay roughly 30 percent in cash and 70 percent in stock. At that level, Facebook is pegging its own stock price at roughly $30 a share. Based on those numbers, the giant social network is valued at north of $75 billion.

During the negotiations with Instagram was discovered that Facebook could soon trade publicly at a much higher market value. As part of the talks, the companies discussed a potential value of about $104 billion for Facebook, these people said.

“Investor demand for I.P.O.’s has been mixed of late. Several Internet companies that went public in recent months are trading below their offering prices. Shares of the daily deals site Groupon, which were sold at $20 late last year, are currently selling for around $12. The online games company Zynga is roughly flat,” The New York Times claims.

Lise Buyer, a former Google executive and the founder of the advisory firm Class V Group, said: “I hope they didn’t agree to this deal because of Facebook’s valuation on the secondary markets. It’s still unclear if there’s a strong correlation between pricing on the secondary markets and the public market.”

Speculations about a Facebook IPO started circulating in 2009 after it was found out that the company modified its stock structure to make a public filing easier. However, not long after another wave of rumors appeared claimind that the company would go public last year, a Bloomberg report claimed Facebook wasn’t even considering the possibility of an IPO until 2012 at the earliest.

Founded in 2004 by Mark Zuckerberg and others, Facebook has become the world’s largest social network, with more than 845 million users. At $104 billion, Facebook is worth more than LinkedIn, Twitter, Groupon and Zynga combined. In 2011, Facebook booked a profit of $1 billion on $3.7 billion in revenue.

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