It’s official: Facebook will go public on Friday, raising just over $16 billion in what will be the largest technology IPO on record.
Facebook said it would price 421,233,615 shares at $38 apiece, raising just over $16.01 billion. The shares will begin selling on Friday under the symbol “FB”, as rumored.
The stock will be split up between Facebook, which will sell 180,000,000 shares of Class A common stock, and the existing stockholders, which are offering 241,233,615 shares of Class A common stock. In addition, Facebook and the selling stockholders have granted the underwriters a 30-day option to purchase up to 63,185,042 additional shares of Class A common stock to cover over-allotments, if any. That could conceivably be worth another $2.4 billion.
Google, the second-largest tech IPO on record, raised $1.9 billion in its 2004 IPO.
Of course, the shares are merely an investment, nothing more: Facebook chief executive Mark Zuckerberg will retain the voting rights to a majority of the company’s shares, giving him absolute power as far as corporate decisions are concerned. Zuckerberg owns roughly 534 million of those shares, which will give him a net worth of about $20.2 billion, in paper, at the opening of trading tomorrow.
Obviously, the stock’s performance will be closely watched, as shareholders and investors watch and wonder at Facebook’s own internal fear factors, as well as the “law of large numbers,” the principle that Facebook simply cannot demonstrate strong user growth when the company already counts nearly a billion users among its members. Investors must also worry about Facebook’s ability to gain revenue from its mobile users, from which Facebook has admitted it hasn’t been able to derive a material amount of revenue.
One third-party developer, iSwifter, claims that its TheWorx app outperforms Facebook’s mobile app because it includes support for Flash games. However, the company’s founder also admitted that it may sell its own ads against Facebook’s content in the future.
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Facebook has been getting a ton of attention because of how rapidly it has integrated itself into the daily lives of so many people.
Facebook via their desktop computers at 5 million with 7 million accessing the social network via mobile devices.
Every month (data as of October 2011) South Africans post 39 000 video clips, 499 000 ‘check-ins’ (showing people their location), 22 million wall posts, 32 million photo uploads, 35 million status updates, sends 102 million messages, posts 106 million ‘likes’ and posts 176 million comments.
South African brands have already achieved success using Facebook as an ad platform including Big Concerts. When it promoted the U2 360° tour in Johannesburg and Cape Town, Big Concerts used Facebook for a teaser and sales campaign over a 15 day period. As a result they added 5 644 fans via the ads to their Facebook page and another 10 000 through the organic spread.
Source: Habari Media
Reprinted from the March 2012 edition of AdVantage magazine. Facebook user stats updated.