Report: Facebook IPO Still Not Coming Soon

Following up on years of Facebook saying that it is not planning to make an initial public offering any time soon or not commenting on rumors to that effect, a new report out… basically has that same message. “Facebook Inc. will probably put off its initial public offering until 2012, giving Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, three people familiar with the matter” tell Bloomberg.

Facebook has no reason to do an offering, as Zuckerberg owns a controlling stake in the company — the other stockholders in the company have to go along with whatever he decides. By going public, he and the company would be under more pressure to make money by public shareholders, and to handle all the expensive financial reporting that comes with being listed.

However, whether or not Facebook goes public in 2012, or sooner, or later, there have been occasional hints that indicate it is planning to go public at some point (rather than, say, never going public). In 2007, for example, it appeared to be hiring for someone familiar with public company regulatory frameworks. Last fall, it introduced a dual-class stock structure that gave existing shareholders ten times the voting power of new people.

Meanwhile, the company began turning a profit last year, growing revenue from around $700 million over that period to around $1.1 billion this year — or so we reported in March. Given how the year is going with its advertising revenue, and the roll-out of Credits, it could make more this year, with Bloomberg citing sources who think the number could reach $1.4 billion.

With fast revenue growth, no immediate plans for an IPO, and the potential to disrupt advertising and payments across the web, Facebook unsurprisingly has investors excited. Many have bought, or have tried to buy Facebook stock on private secondary markets, helping to drive stock prices high enough to imply steep valuations in the $25 billion range, according to some secondary stock sites. In fact, the company has tried to restrict secondary stock sales, as it has to file financial statements with the SEC if it has more than 500 stockholders.

And investors might soon have another way to get Facebook stock — Digital Sky Technologies, a holding company that a small percentage of Facebook, as well as other popular web companies like Zynga and Groupon.

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One Response to “Report: Facebook IPO Still Not Coming Soon”

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