Facebook IPO: Its a matter of when, not if

Mark Zuckerberg at Facebook headquarters, April 2011

As the 2011 calendar year winds down, Facebook is said to now be making concrete steps toward its planned initial public offering.

The Wall Street Journal on Monday afternoon published a report stating that Facebook plans to publicly list its shares on the stock market in Spring 2012, specifically looking at dates between April 2012 and June 2012. Facebooks CFO David Ebersman is currently in talks with investment banks angling to underwrite the IPO, but the company has not entered into any mandates yet, according to the WSJ. The IPO will reportedly value the company at more than $100 billion.

Are you surprised? You shouldnt be. This is all in line with a number of previous reports that the social networking companys IPO could occur around the time this coming spring when it will be forced to publicly disclose detailed financial information anyway. As we wrote this past summer:

Facebook has said it expects to have more than 500 private shareholders by the end of the 2011 calendar year. Once a private company with more than $10 million in assets exceeds 500 investors, it is required to begin filing financial reports with the Securities and Exchange Commission, much like public companies are required to do. Under this regulation, known as the 500 investor rule, Facebook will likely be forced to begin filing financial reports with the SEC by April 30, 2012.

Meanwhile, Facebooks top brass has not been shy about the companys plan to eventually ho! ld an IP O. In an interview earlier this month on the television program Charlie Rose, Facebook founder Mark Zuckerberg said an IPO would serve as a reward to his employees. He also acknowledged that a liquidity event typically either an IPO or a sale is a tradeoff that companies make when they take on venture capital:

You know, weve made this implicit promise to our investors and to our employees that by compensating them with equity and by giving them equity, that at some point were going to make that equity worth something publicly and liquidly, in a liquid way.

Thats why, as much as people may worry about what Facebook will become once its under the microscope of public market investors, a big IPO like the one it is said to be planning is practically a given for a company thats raised more than $2.3 billion from investors. Its price is just too high for the majority of potential acquirers out there. Now, I still say that its in the realm of possibility that Microsoft could make Facebook an offer it cant refuse; but chances are, the Facebook IPO buzz will become a reality at some point soon.

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