6 ms·

Facebook puts off IPO until late 2012

57 points by bhartzer 15y ago

dmk23 15y ago
With all the diffusion of their shares in the secondary markets they are on the way to reach 500 private shareholder limit and be forced by SEC to make the same kind of disclosures as a public company. If anything the IPO timing is probably affected by their ability to stay under this magic 500 number.
- dmk23 15y ago
  Spoke too soon, looks like they have already reached 500 according to the article. In that case hard to see how much value would be in staying "private" given the same disclosures and the liquidity in the secondary markets.
  - nextparadigms 15y ago
    That's because the reason they've been giving to the press "that they want to keep employees hungry" is not really the real reason. With the Google+ launch, they probably think that the market will undervalue them now if they make it public.
  - jpdoctor 15y ago
    The IPO market is not good at the moment, so I suspect that the investors (mark too) are trying to maximize bang for the buck. Maybe after Greece defaults and the EMU cleans up its act. 1+ year is not a bad guess for that to happen.
- wavephorm 15y ago
  Doesn't Facebook have several thousand employees by now? If all of them were given only stock options, and not actual shares, then I'd be pissed. Options are more volatile than normal shares. So if the company stays private indefinitely in a sinking market won't the value of those options drop precipitously?
  - suking 15y ago
    They have some type of restricted stock unit to get around the 500 limit with employees. http://allthingsd.com/20110107/with-500-shareholder-concerns-gone-will-facebook-make-big-acquisitions/ http://allthingsd.com/20110107/with-500-shareholder-concerns...
  - VladRussian 15y ago
    >So if the company stays private indefinitely in a sinking market won't the value of those options drop precipitously? i guess, they'll give out even more options to keep morale afloat and to counter offers from other companies. Ultimately, 6 months (or whatever restricted period is) after the IPO will be very challenging time for the stock when all this pent up cashing out happens :)
dreamux 15y ago
Groupon probably damaged software IPO sentiment, and people want to see how Google+ will play out. Also, they don't really need the cash and waiting will allow them to build a consistent revenue history (which will probably be disclosed, along SEC rules of 500+ investors). They can wait this one out.
- bhartzer 15y ago
  You're right, now is probably not the optimal time for FB to do their IPO right now.
  - dredmorbius 15y ago
    So, you're saying later might be a better time for FB to do their IPO right now?
- andrewljohnson 15y ago
  I think Google+ already played out, the same way Buzz did. It's now just an echo chamber filled with Google employees and my computer programmer friends. It was nice for about two days.
  - dhruval 15y ago
    Google search trend data seems to agree with you... http://www.google.com/trends?q=google+buzz%2C+google+plus&ctab=0&geo=all&date=all&sort=0 http://www.google.com/trends?q=google+buzz%2C+google+plus&#3... But might just be the initial excitement dying down.
    - Steko 15y ago
      Comparison with linkedin, flickr, reddit (us only): http://www.google.com/insights/search/#q=google%20plus%2Cflickr%2Clinkedin%2Creddit&geo=US&date=today%201-m&cmpt=q http://www.google.com/insights/search/#q=google%20plus%2Cfli... Will be interesting to see if that is a real plateau or as you say just the fading of initial interest boom. Next six months should be telling. It will also be interesting to see if they tie G+ into Ice Cream Sandwich or Jellybean somehow to help it snowball.
deleted 15y ago
[deleted]
veyron 15y ago
We've all seen rumored revenue numbers, but is there any indication that facebook is actually turning a profit? If facebook really wanted to boost public image, a whiff of real profit would be the trick.
- jethroalias97 15y ago
  It is profitable: http://www.google.com/search?q=is+facebook+profitable http://www.google.com/search?q=is+facebook+profitable
stmartin 15y ago
Yeah... it can't. In my view, it probably needs a minor integrity clean up - its founder needs to divvy up his stake among the partners that allegedly weren't his partners (e.g. people who sued and walked away from him subsequent its explosive growth) when he started FB. And whatever else lacked integrity prior to starting it too, along the way... While at it, he probably should not pull out of the Giving Pledge. After that, I see no major problems for the IPO.

57 points by bhartzer 15y ago

dmk23 15y ago

With all the diffusion of their shares in the secondary markets they are on the way to reach 500 private shareholder limit and be forced by SEC to make the same kind of disclosures as a public company. If anything the IPO timing is probably affected by their ability to stay under this magic 500 number.

dmk23 15y ago
Spoke too soon, looks like they have already reached 500 according to the article. In that case hard to see how much value would be in staying "private" given the same disclosures and the liquidity in the secondary markets.
- nextparadigms 15y ago
  That's because the reason they've been giving to the press "that they want to keep employees hungry" is not really the real reason. With the Google+ launch, they probably think that the market will undervalue them now if they make it public.
- jpdoctor 15y ago
  The IPO market is not good at the moment, so I suspect that the investors (mark too) are trying to maximize bang for the buck. Maybe after Greece defaults and the EMU cleans up its act. 1+ year is not a bad guess for that to happen.
wavephorm 15y ago
Doesn't Facebook have several thousand employees by now? If all of them were given only stock options, and not actual shares, then I'd be pissed. Options are more volatile than normal shares. So if the company stays private indefinitely in a sinking market won't the value of those options drop precipitously?
- suking 15y ago
  They have some type of restricted stock unit to get around the 500 limit with employees. http://allthingsd.com/20110107/with-500-shareholder-concerns-gone-will-facebook-make-big-acquisitions/ http://allthingsd.com/20110107/with-500-shareholder-concerns...
- VladRussian 15y ago
  >So if the company stays private indefinitely in a sinking market won't the value of those options drop precipitously? i guess, they'll give out even more options to keep morale afloat and to counter offers from other companies. Ultimately, 6 months (or whatever restricted period is) after the IPO will be very challenging time for the stock when all this pent up cashing out happens :)

dreamux 15y ago

Groupon probably damaged software IPO sentiment, and people want to see how Google+ will play out. Also, they don't really need the cash and waiting will allow them to build a consistent revenue history (which will probably be disclosed, along SEC rules of 500+ investors). They can wait this one out.

bhartzer 15y ago
You're right, now is probably not the optimal time for FB to do their IPO right now.
- dredmorbius 15y ago
  So, you're saying later might be a better time for FB to do their IPO right now?
andrewljohnson 15y ago
I think Google+ already played out, the same way Buzz did. It's now just an echo chamber filled with Google employees and my computer programmer friends. It was nice for about two days.
- dhruval 15y ago
  Google search trend data seems to agree with you... http://www.google.com/trends?q=google+buzz%2C+google+plus&ctab=0&geo=all&date=all&sort=0 http://www.google.com/trends?q=google+buzz%2C+google+plus&#3... But might just be the initial excitement dying down.
  - Steko 15y ago
    Comparison with linkedin, flickr, reddit (us only): http://www.google.com/insights/search/#q=google%20plus%2Cflickr%2Clinkedin%2Creddit&geo=US&date=today%201-m&cmpt=q http://www.google.com/insights/search/#q=google%20plus%2Cfli... Will be interesting to see if that is a real plateau or as you say just the fading of initial interest boom. Next six months should be telling. It will also be interesting to see if they tie G+ into Ice Cream Sandwich or Jellybean somehow to help it snowball.

deleted 15y ago

[deleted]

veyron 15y ago

We've all seen rumored revenue numbers, but is there any indication that facebook is actually turning a profit? If facebook really wanted to boost public image, a whiff of real profit would be the trick.

jethroalias97 15y ago
It is profitable: http://www.google.com/search?q=is+facebook+profitable http://www.google.com/search?q=is+facebook+profitable

stmartin 15y ago

Yeah... it can't. In my view, it probably needs a minor integrity clean up - its founder needs to divvy up his stake among the partners that allegedly weren't his partners (e.g. people who sued and walked away from him subsequent its explosive growth) when he started FB. And whatever else lacked integrity prior to starting it too, along the way... While at it, he probably should not pull out of the Giving Pledge. After that, I see no major problems for the IPO.