Facebook files for IPO, hopes to raise $5 billion
NEW YORK (KABC) -- Facebook is going public. The social network filed its long-awaited plans Wednesday for an initial public offering of stock.
The documents, filed online with the Securities and Exchange Commission, say Facebook hopes to raise $5 billion in its IPO. That would be the most for an Internet IPO since Google and its early backers raised $1.9 billion in 2004. The final amount is likely to change during the next three to four months as Facebook's bankers gauge investor demand.
If all goes as planned, it will likely take until May for Facebook stock to begin trading on a stock exchange.
Joining corporate America's elite would give Facebook newfound financial clout as it tries to make its service even more pervasive and expand its audience. It also could help Facebook fend off an intensifying challenge from Google, which is looking to solidify its status as the Internet's most powerful company with a rival social network called Plus.
The intrigue surrounding Facebook's IPO has increased in recent months, not only because the company has become a common conduit for everyone from doting grandmas to sassy teenagers to share information about their lives.
"This is one of those stocks like Disney, where parents are going to buy shares for their kids," said Michael Pachter, managing director at Wedbush Securities. "It's one of those seminal events people can relate to so well, the demand will be huge."
The IPO filing casts a spotlight on some of Facebook's inner workings for the first time. Among other things, the documents reveal the amount of Facebook's revenue, its major shareholders, its growth opportunities and its concerns about its biggest competitive threats.
What's not in there, yet, is Facebook's market value. That figure could hit $100 billion, based on Facebook's rapid growth and the appraisals that steered investors who bought stakes while the company was still private.
About 1,000 Facebook employees stand to make millions.
Facebook claims it now has more than 800 million users, meaning if it were a country, only China and India would have more citizens.
The IPO filing comes eight years after CEO Mark Zuckerberg started the service at Harvard University.
Facebook says it made $3.7 billion in revenues last year, up 88 percent from the previous year. Advertising made up 85 percent of that revenue.
The Associated Press contributed to this report.
economy, facebook, business, elex michaelson
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