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There’s a New Way to Own a Piece of Facebook Before Its IPO

June 27, 2011 by 1 Comment


If you’re looking to invest in Facebook before its IPO but not privy to the secondary markets where shares of the company have been trading, there’s a new (albeit somewhat indirect) way to buy a stake.

The publicly traded investment fund GSV Capital announced on Monday that it has purchased 225,000 shares of Facebook at a price of $29.28 per share, which values the social network at $70 billion.

The investment represents about 15% of GSV’s portfolio — enough to drive up shares of GSV (which trades on NASDAQ under the symbol GSVC) by more than 30% as of midday trading on Monday.

GSV does not currently show any other companies in its “portfolio” on its site, but the firm also recently announced an investment in Kno, a digital textbook outfit that raised $46 million in a round led by Andreessen Horowitz last year.

In a statement issued today, the company says it is “presently in the final stages with a handful of private company investments that it anticipates acquiring within the next 30 days.”

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Facebook’s Journey From Founding to IPO [INFOGRAPHIC]

June 22, 2011 by Leave a Comment


Is Facebook ready for its heavily rumored IPO next spring?

With the massive growth of its staff and userbase, the huge rounds of funding it has taken and its ever-rising valuation, and the company’s increasing significance in the global sphere, the startup has clearly moved into the realm of enterprise.

To quickly sum up the company’s journey from dorm room to Silicon Valley, we have an infographic from real-time social media startup Namesake.

Click image to see full-size version.

[source: Namesake Blog]

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Facebook Preparing for $100 Billion IPO in Early 2012 [REPORT]

June 13, 2011 by Leave a Comment


Facebook is preparing itself for an IPO that could easily top $100 billion, according to a new report.

At $100 billion, Facebook’s impending IPO would be one of the largest in history, quadrupling Google’s $23 billion IPO in 2004.

CNBC says the social networking giant is likely to go public during the first quarter of 2012, less than nine months from now. That falls in line with a May 2012 deadline when Facebook will be required to publicly report its financial information, regardless of whether it’s a private or public company.

The $100 billion valuation isn’t a surprise — there were reports last month that Facebook’s IPO could easily top $100 billion, thanks to huge consumer and investor appeal. In fact, if LinkedIn’s stellar IPO is any indication, Facebook’s valuation could hit the stratosphere the day it hits the public markets.

Goldman Sachs is in the driver’s seat to underwrite the IPO, thanks to its $450 million investment in Facebook earlier this year. Facebook and Goldman might want to hurry, though: the social network’s growth is apparently slowing down.

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Zynga Courts Goldman Sachs for IPO [REPORT]

June 3, 2011 by Leave a Comment


Zynga is trying to get Goldman Sachs to lead its IPO and provide a credit line of more than $1 billion for acquisitions, according to a report.

Goldman Sachs will likely make its decision Friday, according to Bloomberg. Reportedly the game maker will file for an IPO by the end of the month.

Zynga’s looming IPO comes after LinkedIn went public in May, more than doubling its per-share asking price on opening day and surging to a valuation of $8.9 billion. Morgan Stanley, Bank of America Merrill Lynch and JPMorgan led that IPO. Groupon also filed for an IPO on Thursday underwritten by Goldman Sachs, Morgan Stanley and Credit Suisse Group AG. Goldman Sachs is also a key investor in Facebook, which has not yet set a date for its IPO.

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Zynga Courts Goldman Sachs for IPO [REPORT]

June 3, 2011 by Leave a Comment


Zynga is trying to get Goldman Sachs to lead its IPO and provide a credit line of more than $1 billion for acquisitions, according to a report.

Goldman Sachs will likely make its decision Friday, according to Bloomberg. Reportedly the game maker will file for an IPO by the end of the month.

Zynga’s looming IPO comes after LinkedIn went public in May, more than doubling its per-share asking price on opening day and surging to a valuation of $8.9 billion. Morgan Stanley, Bank of America Merrill Lynch and JPMorgan led that IPO. Groupon also filed for an IPO on Thursday underwritten by Goldman Sachs, Morgan Stanley and Credit Suisse Group AG. Goldman Sachs is also a key investor in Facebook, which has not yet set a date for its IPO.

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Is There a Social Media Tech Bubble? [INFOGRAPHIC]

May 29, 2011 by Leave a Comment


Valuations of social media companies are starting to remind us of 1999. But are they overvalued?

Now that Microsoft bought Skype for $8.5 billion, LinkedIn’s IPO valued the company at $8.9 billion after its first day of trading, and Facebook’s estimated value is pushing $100 billion, you might be starting to wonder if buying into user numbers rather than revenue is a good idea.

Social media site G+, a community of professionals, entrepreneurs and academics, put together this detailed infographic that lays it all out in front of you. Take a look at these valuations and let us know in the comments if you think this is getting out of hand:

(Click here for enlargement)

Infographic courtesy Gplus.com

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LinkedIn IPO Is Set for Thursday

May 16, 2011 by Leave a Comment


LinkedIn is set to go public May 19. The business-oriented networking site hopes to raise as much as $274 million this week in what will be one of the first major social media IPOs.

LinkedIn will begin trading on the New York Stock Exchange under the symbol LNKD. Its shares are expected to trade in the $32 to $35 range and 7.84 million shares will be available. The company will likely be valued around $3 billion after the IPO.

LinkedIn announced its intention to file for an IPO in January. At the time, the company was valued at $2.51 billion based on shares traded on secondary market SharesPost.

The eight-year-old company hit the 100 million user mark in March and became profitable in 2010 with a net income of $10.1 million and net revenues of $161.4 million in the first nine months of 2010. In Q1, LinkedIn’s revenues hit $93.9 million, a 110% increase from the year-ago period. Net income was $2 million, compared to $1.8 million in Q1 2010.

LinkedIn is the first of a slew of anticipated social media IPOs set for the next year or so. Others include Facebook, Zynga, Groupon, Pandora, Kayak, Yelp, Rovio and Zillow. Renren, billed as the “Facebook of China,” went public this month and raised $743.4 million.

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Facebook’s Valuation Approaching $100 Billion [REPORT]

May 2, 2011 by Leave a Comment


Facebook’s business is growing faster than the company had predicted a few months ago, leading to speculation that its IPO could be in the $100 billion range, according to a report.

The Wall Street Journal, citing people who’ve seen Facebook’s recent financial information, reports [subscription required] that the IPO could happen as early as spring 2012.

One source says the company is on track to earn $2 billion before taxes, depreciation and amortization this year. That figure is higher than the numbers Facebook presented to Goldman Sachs Group and Russian investor Digital Sky Technologies when they invested in Facebook in January.

At that time, Facebook’s shares were at a price that implied a $50 billion valuation. Now, that number could be twice as much, according to this newest report. If that scenario comes to pass, Facebook’s valuation will be higher than the current figures for Hewlett-Packard, Amazon and Cisco Systems.

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U.S. Government Considering Big Changes to Rules Governing Private Stock

April 8, 2011 by Leave a Comment


Thanks to Facebook, the U.S. government is reportedly close to changing long-standing rules governing private company stock. It’s a move that could fundamentally change the startup, venture capital and IPO worlds.

The Security and Exchange Commission recently issued a letter to Representative Darrell Issa (R-CA), outlining potential changes its heavily considering to how the law treats shares of private companies. “The staff is taking a fresh look at our rules to develop ideas for the Commission about ways to reduce the regulatory burdens on small business capital formation,” SEC Chairmain Mary Schapiro wrote to Issa, according to The Wall Street Journal.

The biggest change proposed in the letter is raising the limit on the number of shareholders a private company can have without being forced to disclose their financial information to the public. Currently that number is set at 499 by the 1934 Securities Exchange Act. It’s a number that Facebook is trying to avoid surpassing so that it doesn’t have to open its books, and it’s also the number that drove Google’s decision to go public in 2004. According to Schapiro, the SEC can increase the limit without Congress’s approval.

By changing this number, startups and fast-growing companies will have more time before they have to disclose sensitive financial information to the public. It could have a dramatic impact on the IPO market by giving companies incentives to delay filing for IPO. In addition, the SEC is considering relaxing the ban on general solicitation, which would make it easier for private companies to publicize private share offerings.

The SEC is also investigating the use of “special purpose vehicles,” a tool used by banks to help rich investors acquire a piece of a private company without surpassing the 499 shareholder limit. Special purpose vehicles received renewed attention after Goldman Sachs used one to help Facebook raise $1 billion from international investors.

The catalyst for these proposed changes seems to be Facebook’s recent round of funding. Because of SEC regulations, Facebook decided not to offer U.S. investors a chance to buy Facebook shares through Goldman Sachs, something that probably didn’t go down well with the SEC. There have been demands for decades to modernize the laws governing private company shares, but the attention on Zuckerberg and Facebook’s rapid growth may be what triggers fundamental changes in the private and public markets.

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