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Facebook to File for IPO Next Week

mashable.com

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Re: Facebook to File for IPO Next Week

#11

Post by chollida1 »

gfodor wrote: post #5
pilom wrote: post #4

Earlier quoted context omitted.

The founders and everyone else with current equity in Facebook need a liquidity event. They are all collectively sitting on $100 Billion worth of value but right now the only way for them to see anything from that value is to collect their share of the profits (if Facebook is even distributing profits as opposed to rolling them into future growth spending). The IPO gives them a chance to actually collect some cash fo…

How is this true anymore with secondary markets? Surely the founders and first employees are all rich by now.

There are often restrictive covenants on employee's wrt what they can sell of their vested stock when a company is private.

The largest secondary market (secondaryMarket) allows the company to list the terms of who, how and when their stock can be traded.

Re: Facebook to File for IPO Next Week

#12

Post by thetrendycyborg »

bitsweet wrote: post #8

What would the world look like if Facebook IPOs and Apple immediately buys them out with their horde of cash?

Wouldn't happen. You can't just make huge purchases on the stock market. They'd have to iceberg that over such a long time I could never imagine it, and even then it would definitely get noticed. They'd have to do a heck of a lot of paperwork too, it would need a lot of scrutiny.

Re: Facebook to File for IPO Next Week

#14

Post by untog »

It'll be interesting to see what Facebook employees do once the IPO goes through. There must be a good number that want to break off and do their own thing, but are sitting on stock they don't want to lose. It'll be interesting to see what ideas/startups they come up with.

Didn't the same happen when Google IPO'd?

Re: Facebook to File for IPO Next Week

#15

Post by necrecious »

nchuhoai wrote: post #2

Just out of curiosity, why is Facebook doing this? I'm unfortunately not very knowledgeable on the field of IPOs, but aren't IPOs usually just needed to raise money? I always thought Facebook is in a position where it does not need to raise money, since it gets sufficient revenue, and being public has its own disadvantages?

I would assume for the benefit of the last round of investors and employees.

Re: Facebook to File for IPO Next Week

#17

Post by necrecious »

untog wrote: post #14

It'll be interesting to see what Facebook employees do once the IPO goes through. There must be a good number that want to break off and do their own thing, but are sitting on stock they don't want to lose. It'll be interesting to see what ideas/startups they come up with. Didn't the same happen when Google IPO'd?

They probably have to wait a bit before selling their shares. So you won't see an exodus until probably a year or two down the road.

Re: Facebook to File for IPO Next Week

#18

Post by trotsky »

gfodor wrote: post #5
pilom wrote: post #4

Earlier quoted context omitted.

The founders and everyone else with current equity in Facebook need a liquidity event. They are all collectively sitting on $100 Billion worth of value but right now the only way for them to see anything from that value is to collect their share of the profits (if Facebook is even distributing profits as opposed to rolling them into future growth spending). The IPO gives them a chance to actually collect some cash fo…

How is this true anymore with secondary markets? Surely the founders and first employees are all rich by now.

I believe that facebook won't allow current employees to trade on the secondary markets (though obviously there will be exceptions to that rule). I also believe that it's been years since facebook has been compensating with actual stock (since '07?), my understanding is that they take the form of restricted stock units that convert into stock once the company is public. This was to avoid breaking 500 shareholders at the time.

I doubt any of those are a primary concern - I think it's much more likely that since they broke 500 shareholders last year they've just assumed they would. With a calm, up market it's probably a better time to IPO than recent conditions. Being able to put $10B in the bank for a rainy day is nothing to sneeze at.

Re: Facebook to File for IPO Next Week

#19

Post by CyrusL »

I took part in SecondMarket's 1/18/12 Facebook auction and was unaware of any trading being halted for that week.

Does anyone know what normal IPO timelines are? My uneducated expectation is that shares begin trading something like 3-6 months after filing the prospectus.

Re: Facebook to File for IPO Next Week

#20

Post by CyrusL »

necrecious wrote: post #17
untog wrote: post #14

It'll be interesting to see what Facebook employees do once the IPO goes through. There must be a good number that want to break off and do their own thing, but are sitting on stock they don't want to lose. It'll be interesting to see what ideas/startups they come up with. Didn't the same happen when Google IPO'd?

They probably have to wait a bit before selling their shares. So you won't see an exodus until probably a year or two down the road.

The lockup is 180 days
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