Facebook IPO: the £64bn question of 2012
If it ever happens, Facebook will be the frenzied float of 2012, with a possible valuation of $100bn (£64.4bn). — An IPO will make founder Mark Zuckerberg one of the world's richest men and many of Facebook's 3,000 employees exceedingly wealthy.
Context & Ripple Effects
The float has been telegraphed for a year: the Wall Street Journal reported in November 2011 that Facebook was targeting an IPO window between April and June 2012, and its privately filed numbers had already been shaping IPO expectations since May 2011. What is new here is the scale being attached to it — a possible $100bn (£64.4bn) valuation, still officially unconfirmed.
The figure also marks how far expectations have travelled: a year earlier, insiders were floating the idea of Facebook aiming to be the first trillion-dollar company, so $100bn reads as the floor of ambition rather than the ceiling. Because the company's finances remain private, the filing itself will be the first full public look at the economics behind the number.
First-order effects
- Mark Zuckerberg and Facebook's roughly 3,000 employees stand to convert restricted stock into paper wealth on listing day, with Zuckerberg joining the ranks of the world's richest individuals if the $100bn mark holds.
- Facebook must open books it has kept private since 2004: the S-1 will force disclosure of revenue, margins and user monetisation that until now has leaked only through partial reports like the numbers that fed the 2011 IPO outlook.
Second-order effects
- A confirmed $100bn benchmark resets the price every late-stage private company can demand, pressuring rivals and startups alike to justify valuations against Facebook's multiple rather than their own revenues.
- An influx of newly liquid employee-shareholders concentrates wealth in a small Bay Area cohort, intensifying competition among employers and funds chasing that capital and talent.
Third-order effects
- If the float lands near $100bn, it cements consumer internet platforms — valued on users and engagement rather than assets — as the decade's defining public-market category, with the eventual filing becoming the reference document regulators and analysts use to judge the whole sector.
- The gap between the rumoured valuation and the still-unseen audited accounts sets up the classic pre-IPO test: whether public-market discipline trims or amplifies the private-market hype cycle that produced the trillion-dollar talk.
The trend: Social networking is moving from privately held hype to public-market scrutiny, with Facebook's filing set to become the template by which every consumer-internet valuation is judged.