Money Matters - Simplified

Facebook IPO coming to market on May 18, roadshow on Monday

The much-awaited initial public offering (IPO) of Facebook is all set for May 18, ahead of a road show to promote it, as per reports by The Wall Street Journal.

According to sources, the WSJ on Tuesday night said that the social networking giant was all set to hold the road show next week and then launch the IPO.

“The roadshow will include Facebook’s chief operating officer Sheryl Sandberg as well as chief executive and founder Mark Zuckerberg,” confirmed reports.

Even though Facebook declined to comment, it has previously revealed that the site has over 900 million users, reporting profits of $203 million on revenue of $1.06 billion for the first quarter. The company's daily active users, meanwhile, increased to 526 million, up 41.4 percent.

The analysts had estimated the IPO to be delayed until June, but the May 18 deadline has come as pleasant news to the share markets. “Facebook has yet to set the final pricing for the offering, which could value the company as much as $100 billion. The money will be likely use to fund corporate expansion, although it could also be used for acquisitions,” revealed an insider.

Nasdaq to be home to Facebook
Reports have confirmed that Facebook will trade under the ticker symbol ‘FB’ on the Nasdaq, following Apple and Google, while the rival NYSE recently won the listings of LinkedIn and Pandora.

Facebook is set to raise at least $5 billion in what will likely be the largest Silicon Valley IPO ever through the roadshow, slated to begin on Monday.

“The world's largest social network continues to command keen investor interest although disappointing first-quarter results raised questions about whether it can sustain breakneck growth for the longer term,” informed a source.

Immense investor demand for tech shares
With a growing demand of tech shares, it is a surprise that Facebook has delayed an IPO listing so far. "I have not seen as broad-based interest in an IPO since Google. Investor demand is immense. I expect a roadshow that will rival all roadshows where investors will be turned away at the door," said Scott Sweet, analyst, at IPO Boutique, a research firm.

He said that it was perhaps the right time for Facebook to float, as the rate of new sign-ups appears to have peaked, and the company's net income fell by 12 percent in the first quarter due to heavy costs, although revenue continued to soar.