Facebook files for an IPO
Facebook and the $5 billion IPO
In a bid to raise $5 billion (£3.16 billion), Facebook has filed for an IPO which will allow members of the public to purchase shares in the social network.
Previously, Facebook has preferred not to release public shares as the majority of shareholders were employees. However, Facebook COO Sheryl Sandberg stated at the Reuters Global Technology Summit in May 2011 that an IPO would be “inevitable” for the company. This transition has been made easier as staff have been selling their Facebook shares over time.
Within the Facebook S-1 – the IPO registration statement – founder Mark Zuckerberg stated: “Facebook was not originally created to be a company. It was built to accomplish a social mission – to make the world more open and connected.” He went on to say: “Simply put: we don’t build services to make money; we make money to build better services.”
From Zuckerberg’s comments, it appears that the $5 billion Facebook hopes to receive from the IPO will go towards improving the social network for both its present and prospective users. Within the Facebook IPO registration form, the social network’s ambition to reach all two billion internet users was made clear, and its multi-billion dollar boost could help it create better services for countries just beginning to sign up to the site.
The announcement of the Facebook IPO also revealed the amount of stock owned by certain employees, investors and Mark Zuckerberg. The founder has the largest number of shares, worth 28.2 per cent of the company. He is followed by investor Accel, Accel partner Jim Breyer and Facebook co-founder Dustin Moskovitz.
Daniel Nolan, managing director at theEword, said: “The Facebook IPO is set to be a profitable move for Mark Zuckerberg. Despite releasing some shares and relinquishing a small amount of power in the company, Facebook will receive $5 billion to help improve the social network and increase its number of users.”