Facebook Inc is considering raising about US$10 billion in an initial public offering (IPO) that would value the world’s largest social-networking site at more than US$100 billion, a person with knowledge of the matter said.
The company may file for the IPO before the end of the year, said the person, who asked not to be identified because the deliberations are private.
Exact timing for the filing has not been determined.
Facebook’s US$100 billion valuation would be twice as high as it was in January, when the company announced a US$1.5 billion investment from Goldman Sachs Group Inc and other backers. Facebook aims to capitalize on strong demand for social-networking IPOs, said Josef Schuster, founder of Chicago-based IPOX Schuster LLC.
“It’s obviously a very steep valuation,” said Schuster, whose firm invests in IPOs and oversees about US$2.5 billion in assets. “They are realizing their window of opportunity and they want to do it sooner rather than later.”
At US$10 billion, the offering would raise more money than any other technology IPO, a sign Facebook expects investors to clamor for a piece of the social-networking company.
The amount would dwarf that of the previous record holder, Infineon Technologies AG, which generated US$5.23 billion in its 1999 debut. Agere Systems Inc raised US$4.14 billion in 2000, putting it second.
Facebook’s IPO is far enough away that the details might change, said Lise Buyer, principal of the Class V Group, an IPO advisory firm.
“It’s far too early to accurately predict where the valuation will be on deal day,” she said.
Facebook expects to be required by US regulators to disclose financial results by April 30 next year, if it doesn’t go public by then, the company said in January.
Facebook decided to wait until next year for its IPO to give CEO Mark Zuckerberg more time to gain users and boost sales, people familiar with the matter said last year.
Facebook, with more than 800 million users, is also increasing its focus on mobile technology.
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