June 13, 2011

Facebook IPO May Come Soon, But...

Business Insider:

The long-awaited Facebook IPO looks like it will come as early as the first quarter of 2012, CNBC's Kate Kelley reports, citing sources. Facebook could file its S-1 to the SEC in October.

The piece speculates that the initial valuation might be in the neighborhood of $100 billion.

However (Business Insider),

Facebook has had two straight down months for active user growth, including unusual traffic drops during the month of May in markets where it has been available the longest,according to Inside Facebook Gold.

Facebook's advertising reach has fluctuated in its oldest markets (such as the US) over the past few months, leading some to wonder whether the company has reached a point of saturation in some markets.

Facebook responded to the contrary (Business Insider), pointing to comScore's traffic analysis numbers but declining to provide their own:

From time to time, we see stories about Facebook losing users in some regions. Some of these reports use data extracted from our advertising tool, which provides broad estimates on the reach of Facebook ads and isn’t designed to be a source for tracking the overall growth of Facebook. We are very pleased with our growth and with the way people are engaged with Facebook. More than 50% of our active users log on to Facebook on any given day.

Having waited to file for an initial offering, I wonder if Facebook might now face a plateau in customer adoption just as they try selling themselves to the public as a company with room to grow.

In any event, two things are known. First, an Facebook IPO will net the company a huge pile of cash, and second, you probably won't be able to snag any of the shares until they trade on the open market. At that point the initial round of profit will have passed and it's anyone's guess where the shares will trade thereafter.

But hey, someone's going to make a killing.