Facebook IPO Set For May: Source

By Alexei Oreskovic and Sarah McBride

SAN FRANCISCO, March 28 (Reuters) - Social-networking site Facebook is halting the sale of its shares on secondary markets effective next week as the company prepares to hold its initial public offering in May, according to a person familiar with the matter.

Facebook recently asked firms that arrange trading of its privately held shares to stop doing so, a move intended to reduce churn in its valuation that could complicate matters as it sets an IPO price, according to another person familiar with the matter.

Facebook is planning to raise $5 billion in an offering that could value the company at up to $100 billion, making it the largest IPO in Silicon Valley history.

The May time frame for the high-profile IPO is dependent on the Securities and Exchange Commission declaring the company's prospectus effective, the first source noted. Facebook has amended its prospectus three times since filing paperwork to go public in early February.

A Facebook spokesman declined to comment.

The company has said it wants its shares to trade under the ticker FB, but has yet to announce which exchange it will list its shares on.

With more than 845 million users, Facebook is the world's No.1 social networking service and is challenging established Web companies such as Google Inc and Yahoo Inc , which compete with Facebook for users' time online and for advertising dollars.

As Facebook moves towards its IPO, some investors are raising concerns about Facebook's dual-class share structure, which will give Chief Executive Mark Zuckerberg control of 56.9 percent of the company's post-IPO voting shares. At a recent meeting with financial analysts and investors, Facebook executives suggested that Zuckerberg will not be very involved with Wall Street. [ID: nL2E8EN2CI]

Despite the criticisms, investor demand for equity in Facebook has burned strong for years, with shares of Facebook trading briskly in special secondary markets for private company stock.

SharesPost Financial, a firm that facilitates trading shares of privately held companies such as Facebook, announced on Wednesday that it would cease facilitating transactions in Facebook as of the end of day on Friday "to help ensure the company's orderly transition into the public markets."

SecondMarket, another firm that arranges trading in private shares, declined to comment. Bloomberg reported the news earlier Wednesday.

Take a look at the slideshow (below) to view some of the biggest risks facing the company, according to its pre-IPO S-1 documents filed with the SEC on February 1.

Comments

[bdgrizcp]

04:44 AM on 04/19/2012

Never having contracted the social networking disease, I cannot fathom how this company could be worth more than the salvage value of its computer system. It's like they're attaching a dollar value to non-fee paying victims through an assumed (and arbitrary) algorithm that equates hits on ads to some sort of revenue scam. Facebook is no more than electronic noise. That there is a ceiling to FB's potential subscriber base needs to be considered by anyone thinking of investing.

[-Steve]

05:45 AM on 04/09/2012

Thoughts on the Facebook Valuation - http://jemss.blogspot.com/2012/03/facebook-valuation-model.html

[artfish]

05:49 AM on 03/29/2012

Dear Zuckerberg, You have a big brain. Aren't you bored yet? How about a new project. Use that brain to design something really useful. I'm not sure what as my brain is not on par with yours. How about you exercise your heart in conjunction with your brain and create something that might help with world hunger, or healthcare communications, or environmental studies. Just askin', you're young, are you a one trick pony?

[NewsCoffee]

03:26 PM on 03/30/2012

I don't get this type of post. For one thing, Mark Zuckerberg is doing good stuff for the world - building a platform that millions of people communicate on, find love on, enjoy, and businesses build on is something that helps improve the world. Second of all, he isn't a saint. He has an obligation in his life to do what he wants to do and make himself happy, not fulfilling the dreams of others. A lot of people really like to dump on Mark Zuckerberg's character, and while he may or may not be of questionable ethics, he really has done a fabulous job running Facebook. The upcoming Facebook IPO is going to set their value at over ONE HUNDRED BILLION DOLLARS in my opinion. For a company that's relatively young, that's incredible. They've gained a lot of goodwill and favor from the business community: look at how many big brands promote their Facebook URLs on TV ads, look at how many companies are listed at http://www.buyfacebookfansreviews.com that do nothing other than promote business pages. And they're nearing a billion active users as well. Zuckerberg may not be a saint, but he's a heck of a businessman and deserves a lot of credit for Facebook's continued success and his only real obligation is to follow his own dreams.

[realitytrumpsbull]

08:54 PM on 04/01/2012

How much altruism is there in the world? I mean, c'mon. What's the privacy fracas about? Datamining. By using Facebook, you're consenting to having your information shared with all kinds of people including 3rd parties, shared databases, electronic mailing lists, and and and. And, it's the 21st century. Spam!

[Richcrafter]

02:27 AM on 03/29/2012

Hoodie???

[guoyakla]

02:24 AM on 03/29/2012

Facebook is Oz, and Marky-boy is the Wizard. All devilish things must come to an end, Marky-boy. Give the "a"sses back their collective lives, Marky-boy, so they can get back to being good students, good friends good parents, hell, so they can get back to being good human beings.

[MrSolo]

02:07 AM on 03/29/2012

Only an idiot would buy stock in a sandbox. Facebook isn't worth the letters in its name.

[Gravenstein]

01:34 PM on 03/29/2012

Only an idiot would say that a company that made 3.71 billion last year is worthless.

[Daniel Miller]

01:02 AM on 03/29/2012

And then they implement timeline and it becomes the new myspace.

[artfish]

05:39 AM on 03/29/2012

I hate timeline. It is bad graphic design. There is a reason for negative space. It gives the eye a resting area. Big, big pictures and scattered commentary make it hard work to read it.

I used to check it everyday. Now I check it about twice per week out of obligation in following my kids.

[jerseymaiden]

10:23 PM on 03/28/2012

I thought they already had their IPO a few months ago! What was all that about?! How many damn IPOs can a company have, anyway? How many times do these f oc k ers have to do this, they get rich ever time so what, they just keep going??

[jd2020]

10:15 PM on 03/28/2012

Can't wait to see the lemmings rush into this IPO before Facebook "value" collapses.

[Tris Will]

09:51 PM on 03/28/2012

Zuckerbergs stubborn personality is already turning Facebook against itself. He went from a simplified website, to ads being all over the place. Ad's take up the whole website now, pictures, newsfeed, wall, privacy control window.

[GravitonX]

09:51 PM on 03/28/2012

Tulip mania. It will do well. Guaranteed.

[david kenner]

09:01 PM on 03/28/2012

Zuckerberg is sporting a hoody in memory of tr...........naaaa......

[TheMuckraker]

08:42 PM on 03/28/2012

I hope they start charging membership fees.
That will free up a little time for me.

[darter22]

08:24 PM on 03/28/2012

Stay away from this stock or you will get burned. The profits will go to the insiders and everyone else will get burned. Many of the 845 million users are people like me who signed up once a few years ago and never went back.

[ver1tas]

11:09 PM on 03/28/2012

845 million users
500 million active users

[Aleks Rodriguez]

08:55 AM on 03/29/2012

The site still gets over 200,000 new users everyday. Facebook is not going away and no other social networking site is even remotely close to overcoming it.

[TexasUser]

07:21 PM on 03/28/2012

I hope there will be an alternative to facebook some time soon. I do not like google plus. I also hate that google tends to use your info for all kinds of s h it. I hate facebook's timeline. I've been holding out as long as I can. The timeline needs to go. You don't know which side to look for new posts on a person's page and all the info is hidden and not as nicely displayed as it is now with the old version. Once they make the switch for everybody, I'm gone.

[mjames5464]

08:34 PM on 03/28/2012

Theres already the alternative,phone,written letter,even texting. Never jumped on the Facebook or twitter bandwagon....I can get by just fine without..only a matter of time before people are leaving en mass..

[sunflower12]

08:45 PM on 03/28/2012

Well said. Me too, I'm just waiting for them to go away. It will happen, once people finally realize it's better to have a real life, as opposed to a virtual one. Plus privacy, who needs to know what these people are doing 24-7?

[VirgoLinnea]

09:46 PM on 03/28/2012

I really like that other alternative, you know, the one where the other human body is in the same general area as yourself. It's pretty neat and makes virtual reality games less exciting!

[Styxtap]

10:13 PM on 03/28/2012

twitter is amazing but none of my favebook friends want to join. I think twitter is the future facebook fer sure