Facebook is reportedly targeting an initial public offering of $10 billion as early as April that would value the social-networking king at a whopping $100 billion.
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The gaudy numbers being floated around for the potential IPO underscore the enormous anticipation for a Facebook IPO, which has spawned great demand for offerings of other next-generation Internet companies like Groupon (GRPN) and LinkedIn (LNKD).
According to The Wall Street Journal, after resisting calls to go public for years, Palo Alto, Calif.-based Facebook is targeting a time frame of April to June 2012 for an IPO.
Facebook co-founder and CEO Mark Zuckerberg, who would make an estimated $24 billion if the company IPO’d with a $100 billion market cap, is warming to the idea of going public, but hasn’t made any final decisions, the paper reported.
Still, the company is in talks with the Securities and Exchange Commission over the timing of its filing and is considering filing dates as early as this year, the Journal reported.
A $100 billion valuation would mark the largest IPO price tag ever by a tech or Internet company. It would easy dwarf the largest U.S. Internet IPO: Google’s (GOOG) 2004 debut that valued the search company at $23 billion.
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Likewise, at $10 billion, the potential Facebook IPO would represent one of the largest offerings on record. According to the Journal, which cited Dealogic data, only three U.S. IPOs have had larger offerings, Visa (V) at $19.7 billion in 2008, General Motors (GM) last year at $18.1 billion and AT&T Wireless Services at $10.6 billion in 2000.
While investment bankers at Goldman Sachs (GS) and elsewhere may be drooling over the fees that could come out of a Facebook IPO, the company doesn’t seem to feel the same way.
Facebook hasn’t committed to any specific banks and David Ebersman, its chief financial officer, has told some bankers that he is skeptical of what contribution investment banks could make to the IPO because of the intense demand for Facebook shares, the Journal reported.
Even though LinkedIn, Pandora (P) and others enjoyed strong debuts this year, there are signs investors have grown skeptical about the true valuations of companies in this sector. For example, shares of Groupon have plummeted 41% over the past month, while Pandora is off 33% over that span.