When is Facebook iPO date?
Facebook iPO is scheduled for Friday May 18th , 2012
What is the Facebook iPO Price?
Price is set on the Facebook IPO at $38 per share
What is the Facebook IPO Stock Ticker?
The Ticker for Facebook will be Nasdaq:FB
This Facebook blog was done by @Graphitic from our Premium Chatroom you can follow him on twitter : here
FB – Facebook, Inc. is planning on offering 484 million shares (including over-allotments) at a range of $34-$38 and the insiders will be selling 300 million shares of the offering. FB will not receive any proceeds from the sale of shares by the selling stockholders. Morgan Stanley, JP Morgan, Goldman Sachs, BofA Merrill Lynch, Barclays, Allen, Citi, Credit Suisse, Deutsche, RBC Capital Mkts and Wells Fargo securities are leading the deal, many other firms co-managing. Post IPO FB will have 2.644 billion shares outstanding for a market cap of $ 95.184 billion on a pricing of $36.
Co-Founder and CEO Mark Zuckerberg will own approximately 30% of FB post-ipo. Mr Zuckerberg will control voting interests in FB via a separate class of stock with 57.3% voting power.
From the SEC Facebook prospectus: you can see full filing here : http://sg22.ly/Jk7zga
Our mission is to make the world more open and connected.
People use Facebook to stay connected with their friends and family, to discover what is going on in the world around them, and to share and express what matters to them to the people they care about.
Developers can use the Facebook Platform to build applications (apps) and websites that integrate with Facebook to reach our global network of users and to build products that are more personalized, social, and engaging.
Now let us look at the numbers:
At the end of March 2012 FB had 901 million actives users which is 33% above the 680 million users at the end of March 2011, that is a staggering increase in itself. Looking at the daily active users FB had 526 million at the end of March 2012 an astounding 41% higher than the 372 million users at the end of March 2011. Coming in to the IPO’s pre 4 quarters FB had seen daily active users increase at 12%, 9.6%, 5.7% and 9% most recent quarter very impressive stat that is.
FB daily active user definition is little bit tricky and does not have true ‘stickyness’ associated to it, one is counted as a daily active user even if they never visited FB site but hit the ‘like’ button in response to content on any site that links ‘likes’ to FB. To be counted as a daily active user one need not be an active FB account holder. 3.2 billion likes and comments per day end of March 2012.
The core philosophy behind the founding of FB is for users to find and connect with friends and family and share various things like opinions, likes, photos and many other things with friends and broad public user base of FB, we have to commend FB for doing away with anonymity in accounts and believing in true accounts with authenticity which brought the curtain down on fake and bogus accounts which meant many users with multiple accounts under different aliases, with FB all of that wa s done away with giving rise to clear communication.
If numbers alone is a metric to recommend this IPO then FB is gets a strong recommendation. But let us look at the valuation since the numbers need to transform in to revenue stream and result in strong cash flow mechanism to yield strong earnings. North American markets have seen growth slow down with respect to active users. FB revenues depend on two streams one is advertising and the other is revenue generation from developer applications. FB has a infrastructure mechanism where developers receive payments from users for the virtual goods sold. FB receives fees as % of transaction value for the service offering from the developer to the user. FB also places ads on the applications from developers.
In 2011, approximately 15 million users purchased virtual goods using FB Payments, I see a red flag here 15 million is 1.5% of the active user base and a low % at that. According to NPD worldwide $ amount generated from sale of virtual goods is $9 billion in 2011 and forecast to grow to $14 billion by 2016 looking at the % of annual growth we need to pause and ask why we should give valuation premium to FB. Let us look at other things before we make an informed call.
Advertising revenue consisted 82% of total revenue at the end of March 2012 quarter and 18% of total revenue was derived from virtual payments. Of all the revenue at the end of March 2012, Zynga accounted for 11% and 4% of total revenue was derived via display ads on Zynga apps, to me that is huge dependency on Zynga and kind of makes FB’s wide reach and penetration look ‘shallow’. That stat alone is enough for me to step to the sidelines.
FB plans on growing user base in under penetrated markets such as Germany, Brazil, Japan, Russia , India and South Korea. FB is not available in China at this time.
The challenges in my view are monetizing the user base, especially when the delivery mechanism is mobile, to this date FB has not shown any convincing process to do the same. The key to generate revenue stream on the mobile devices is yet to be solidified from FB.
Post IPO FB will have $9.5 billion cash works out 3.5$ per share. Now on to some thing I am not happy about FB will incur a $4 billion tax hit on restricted stock units which will be available after lock up expiry of 180 days, factor that in we have 4.5 billion in cash and also FB going to pay around 300 million for Instagram acquisition that will mean 4.2 billion cash equating to around $1.60 in cash. FB is planning to issue 22.9 million shares to cover Instagram acquisition.
One needs to be aware of the fact that lockup expiry will be upon FB, 171.79 million shares to hit mkt after 91 days and 137 million to hit market after 151-180 days.
Looking at revenue growth past 2 years stellar growth rates at 154%, 87% and 44.7% Mar 2011 to March 2012 growth slowing down I can see, revenues in 2011 stood at 3.71 billion.
2011 – $3.71 billion in revenues. Gross margins of 67%. Operating margins of 47%. 27% Net margins. EPS of $0.43.
Looking at 2012 a forecast of 42% on revenues would yield an EPS of 0.54 on revenue of $5.26 billion, pegged the operating margins and net margins at the 2011 level which would put them at 66.66 times EPS.
The kind of premium FB is trying to trade is some thing I am not willing to accept they have strong user base but they are not a power house operation like an AAPL or GOOG I simply do not see that. FB wanting to trade 19 times revenues at 95 bil mkt cap.
I do not see any true comparable, LNKD does compare to FB to some extent but not apples to apples which may make them unique but still lot of premium on this one.
Amazingly successful FB is but valuation wise not cheap at all.
The negatives to me are slowing growth, plateauing user base in developed countries who are the bulk of paying users, and the dependency on ZYNGA what it ZYNGA games lose appeal what does that mean to FB these are some thing that need to be addressed by FB management and also how they are going to monetize mobile delivery stream.
My conclusion exciting IPO but not really sure if it is workable mid term to long term, short term may open higher and trade higher but an year or two from now is where to it goes is hard to say.
One to watch and wait on in my opinion.
Some interesting articles/videos /slideshows on the upcoming Facebook IPO:
Facebook iPO Final Price:
CNBC Webinar: Inside Facebook’s Money Machine
Facebook Timeline: From Dorm Room to IPO
Facebook’s Valuation: What $104 Billion Is Worth
Nasdaq Plans 2-Hour Call Friday for Facebook IPO
Slideshow: Inside Facebook
Facebook wraps up IPO, set for big Friday pop
Facebook IPO: How long will the euphoria last? Well, a few hours at least
Stakes are high on Facebook’s first day of trading
Morgan Stanley ( NYSE:MS) ups Facebook IPO share cap to 5,000
Facebook IPO: This is Where Facebook’s Revenue Growth is Going to Come From
Facebook Graffiti Artist Could be Worth $500 Million
Facebook insider sales are huge red flags
Commentary: Think you’re smarter than Peter Thiel or Goldman Sachs?