Business

Winnipeg Free Press - PRINT EDITION

When Facebook goes public, it will probably go big

By: Ryan Nakashima

Posted: 01/28/2012 1:00 AM | Comments: 0 (including replies)

LOS ANGELES -- When Facebook makes its long-expected debut as a public company this spring, the social-networking giant will likely vault into the top ranks of the largest public companies in the world, on par with the likes of McDonald's, Amazon.com and Bank of America.

The Wall Street Journal reported Friday that Facebook is preparing to file initial paperwork for an offering that could raise as much as $10 billion and value the company at $75 billion to $100 billion. The filing with the Securities and Exchange Commission could come as early as Wednesday, with an initial public offering of stock in three or four months.

The targeted amount would slot it among the world's 25 largest IPOs, although as recently as November 2010, General Motors raised $15.8 billion when it shed majority control by the U.S. government.

The IPOs of 14 companies would rank higher than Facebook's, according to investment adviser Renaissance Capital. Among them are Visa's $17.9-billion IPO in March 2008, the largest for a U.S. company, and world-topper Agricultural Bank of China Ltd., which raised $19.3 billion in July 2010, not including extra shares issued to meet demand.

Facebook spokesman Larry Wu said the company will not comment on IPO-related speculation. The Journal had cited unnamed people familiar with the matter.

The Journal also said Facebook was close to picking Morgan Stanley as the lead underwriter, which would be a setback for rival Goldman Sachs. Both declined comment to The Associated Press.

The buzz surrounding an outsized haul for Facebook's founders, employees and early investors remains a hopeful symbol for capital markets following the deep recession. At the reported price, Facebook's IPO would be the biggest for a U.S. Internet company ever, topping the debut of one of its main rivals, Google Inc.

"We are expecting 2012 to be a year of recovery for the IPO market, led by the Facebook IPO," said Kathy Smith, Renaissance Capital's principal.

Facebook's will be the most anticipated tech IPO since Google went public in August 2004. Not including shares sold by early investors, the Internet-search giant raised $1.2 billion and grabbed a market value of $23 billion, the biggest so far for a U.S. Internet company. The IPO raised $1.9 billion.

Facebook's reported valuation of $75 billion to $100 billion compares with about $100 billion for McDonald's Corp., $90 billion for Citigroup Inc. and Amazon.com Inc. and $75 billion for Bank of America Corp. It would exceed the market cap of $55 billion for Hewlett-Packard Co., one of the world's largest technology companies by revenue.

-- The Associated Press

Republished from the Winnipeg Free Press print edition January 28, 2012 B4

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