Facebook, LinkedIn Racing to Go Public
Facebook, which the Wall Street Journal calls "one of the world's hottest technology companies" (have you heard?), will likely go public this year as its shareholders surpass 500 in number, forcing the company to either disclose its financial information "or go public by April 2012." This comes on the heels of Goldman Sachs Group's $450 million investment in Mark Zuckerberg's company. But to really spice things up, another of the world's hottest tech companies, LinkedIn, is also planning to file its IPO in 2011. We smell a Social Network sequel!
On Facebook, from the Journal:
The investment world has been so eager for a Facebook IPO, it has spurred active trading in shares of Facebook's still-private stock in secondary markets.
The 100-page document that includes the potential timetable for a Facebook public offering is being circulated to would-be investors in the $1.5 billion "special-purpose vehicle" created by Goldman.
Goldman sent copies of the private-placement memo throughout the day Thursday, often by messenger instead of email to prevent leaks. In some cases, even spouses of the document's recipients were asked to sign a confidentiality agreement.
The document contains much more financial information about Facebook than previously known outside the company. For example, in the first nine months of 2010, Facebook had net income of $355 million on revenue of about $1.2 billion, said one person who reviewed the results.
"An IPO is just one of many tactics that we could consider," a spokesman for LinkedIn said on Wednesday. He declined further comment.
"Some of these companies want to go public because they want to beat Facebook and others out," one source told Reuters. "If Facebook went public before Linkedin, do you think anyone would pay that much attention to Linkedin? You might want to surpass the beast." Now that's the spirit!