could raise approximately $16 billion in funding when it begins selling shares after the internet behemoth priced its shares at $38 per share. The company is valued at approximately $104 billion as a result, ranking it higher than the likes of Disney
. Facebook announced that it will sell an initial offering of 421,233,615 shares. Facebook’s debut on the stock market will make it the biggest tech company IPO ever and should create approximately 1,000 millionaires overnight.
Founder of market researcher Altimeter Group
, Charlene Li, said that this IPO will have a massive impact. Li added, “No one will touch Facebook in its market for the next few years." Not good news for the likes of Google and other companies which hope to enter the social networking industry.
However, it is good news for Facebook’s initial investors who got the website off the ground and for those who have put so much work into making it what it is today. One venture capitalist, Peter Thiel
, invested $500,000 in the company in 2004 and is expected to sell nearly 17 million shares, earning himself $640 million.
The raising of finance is also good news for Facebook as a company and users. It allows the company to invest in talent and ensure that servers and data centres can keep ticking over. Zuckerberg previously said, “We don't build services to make money; we make money to build better services.” At the same time, it is unlikely that he will ignore the wishes and desired return of investors.
Facebook has gone from a company with seemingly no way to generate revenue to one that makes billions per year. The pressure is sustaining this and continuing to grow. Facebook is researching and experimenting with new ways of generating ad revenue, including allowing users to promote their posts
once they have the cash to back it up. Facebook will be under more scrutiny than ever as soon as its shares hit the market; time to see if it can cope with the additional pressure.
If you believe that Facebook is more than a passing fad, and have some spare change lying around, its shares will go on sale shortly.