Facebook may delay IPO until late 2012

Facebook is expected to eventually file for a public stock offering which could generate a ton of money for the popular social networking service. But Facebook and its founder and CEO Mark Zuckerberg don't seem to be a hurry to get that IPO started. The Financial Times reports via unnamed sources that Facebook doesn't plan to launch its public stock offering until September 2012 or even later in the year. The company was previously expected to launch its IPO earlier in 2012.

Unlike other companies who have delayed their own IPO launches due to the current poor economic climate, the reasoning behind Facebook's delay is due to internal business issues. The story claims that Zuckerberg wants Facebook's employees to concentrate on working on its various ongoing projects rather than having them wonder how much money their stock is worth.

Another reason why Facebook might not be eager to launch its IPO is that it's doing pretty well as a private company. Earlier this month a report claimed that Facebook generated $1.6 billion in revenue for the first half of 2011, about twice as much as it brought in for the first half of 2010. While the company is privately owned, it does have more than 500 stockholders. Because it has reached that milestone, the US Securities and Exchange Commission's rules state that Facebook must offer official financial numbers by April 2012. Most companies go ahead and launch their IPO when that stockholder requirement is reached but it seems that Facebook will be an exception.

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5 Comments

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Let me guess. They tried to launch the IPO; however, they were greeted by this message:

"Oops! Something went wrong. We're working on getting this fixed as soon as we can. You may be able to try again."

if you are getting $1.6 billion in rev as a private company, do you really need an IPO when you aren't doing too much more then a single task? unless they want to drastically expand what they do into other markets and ideas...

Stewart Gilligan Griffin said,
if you are getting $1.6 billion in rev as a private company, do you really need an IPO when you aren't doing too much more then a single task? unless they want to drastically expand what they do into other markets and ideas...

it helps combat competition because they can raise money extremely fast.. think if apple was private this entire time they might of had trouble releasing the ipod and then expanding at the pace they did once it was out..

if your competitors can raise money super fast it makes it hard if you cant do the same thing..

Lachlan said,

it helps combat competition because they can raise money extremely fast.. think if apple was private this entire time they might of had trouble releasing the ipod and then expanding at the pace they did once it was out..

if your competitors can raise money super fast it makes it hard if you cant do the same thing..

Yeah but Facebook doesn't exactly have any serious competition, and they make/have plenty of money.
I agree that an IPO is a bad idea for them because it opens the door for them to appear to be "in bad shape" when the economy slumps. Pandora, LinkedIn, and others have been pretty sad as of lately since opening their IPO.

Stewart Gilligan Griffin said,
if you are getting $1.6 billion in rev as a private company, do you really need an IPO when you aren't doing too much more then a single task? unless they want to drastically expand what they do into other markets and ideas...

Facebook has a number of private equity shareholders. Private equity funds generally have a 5 year plan whereby they plan on exiting within 5 years of investment.

The IPO gives them a way to do so while also turning a huge profit.

In a closed, non-public company, it is extremely difficult to sell off large equity shares without drawing the ire of the SEC.