MUMBAI: Social networking site, Facebook, has filed for an historical $5 billion IPO with the Securities and Exchange Commission in United States, making it one of the biggest in the Internet industry.
Analysts though predict the IPO to raise as much as $10 billion which would value the company at a mind-boggling $100 billion, and will dwarf the 2004 IPO of search engine giant Google Inc which raised $1.67 billion.
At $10 billion, the IPO would be fourth-largest in U.S. history after Visa Inc, General Motors, and AT&T Wireless, according to Thomson Reuters.
Launched in 2004, the social networking giant commands an active user base of over 800 million with revenues of $3.71 billion and a net profit of $1 billion last year. The company also revealed in its filing that it had earned 85 per cent of its revenue from advertising last year while social-gaming company Zynga, creator of Farmville, accounted for 12 per cent of total revenues.
The IPO would increase the fortune of Facebook founder Mark Zuckerberg who would be worth $28 billion at a $100 billion valuation with an economic control of about 28 per cent of the shares, thereby ranking him as the fourth-richest American.
Indications are that he would keep an iron grip over the company even after the IPO, which analysts fear would mean little say for investors in the management of the company.
As Facebook states in its prospectus, Zuckerberg will "control all matters submitted to stockholders for vote, as well as the overall management and direction of our company."
Other major shareholders in Facebook include Accel Partners with 11.4 per cent of the investor votes and co-founder Dustin Moskovitz, who holds 7.6 per cent voting power, Facebook employees have majority stake at 30 per cent besides a host of institutions and small investors.
Facebook‘s stock would trade under the symbol FB on either the Nasdaq Stock Market or the New York Stock Exchange. The company plans to use the proceeds for working capital and other general corporate purposes.
The company has appointed Morgan Stanley, Goldman Sachs and JPMorgan as its lead underwriters. Other bookrunners who were appointed to manage the IPO included Bank of America Merrill Lynch, Barclays Capital and Allen & Co.
With consumers shifting their preference to smartpphones and tablets as the preferred medium of accessing content, Facebook has turned its focus to the mobile technology, which it expects would bring in its next 1 billion users.
