SOCIAL NETWORKING PEOPLE FARM Facebook has kicked off its initial public offering and will sell 421,233,615 shares for $38 each.
That sounds like a lot of money, and indeed it is. It clocks up to a massive $100bn which is not bad at all for an eight year old business, based, on the face of it, on uniting people.
Shares start trading later today and will probably sell like the proverbial hot cakes since most people realise that the Facebook business is big business. But it might give the firm some additional pressure, what with all those people hoping to make money off the back of all those other people.
Victor Basta, managing director of Magister Advisors said that the firm will have to work hard to live up to the value of its IPO and will have to push itself to increase advertising revenues.
"Facebook will need to generate annual revenue of $30-$40 billion in order to justify the likely IPO valuation of the business. This is a ten-fold increase over the revenues that it currently generates. The question is ‘where from?'," he said.
"Advertising is fundamental currently, and Facebook will have to channel ad dollars away from other players and onto its platform to achieve this. Enhanced services to companies would also be a logical step."
Facebook's own statistics pages show that it has 901 million monthly active users, as of the end of March 2012 and 526 million daily active users. On average just under 400 million are active on its pages for six out of seven days of the week.
Mark Zuckerberg, twenty something billionaire who started Facebook in his dorm room has over 50 per cent of the shares in the firm, meaning that ultimately he maintains control. µ
Tabs to more Ctrl and less Win. Such Fn.
Either that or it's a really intense holiday