Is Facebook IPO on Track for Late May?
According to multiple sources, the long anticipated public offering of Facebook is now likely to come in the third week of May. — That means that the company must file its IPO documents within the next month, given the review by the Securities …
Context & Ripple Effects
The late-May target narrows the April-to-June window the Wall Street Journal reported in November 2011 into something concrete: per multiple sources cited by AllThingsD, the third week of May, which puts the SEC filing deadline roughly a month out. It also builds on the financial details that leaked in May 2011, which first gave investors a look at the numbers underpinning the offering.
The rumored scale — a possible $100bn valuation that would make Mark Zuckerberg one of the world's richest people and enrich much of Facebook's 3,000-person staff — is why the exact week matters beyond Facebook itself. The company has spent the run-up shipping product like Timeline while its US user growth saturates, so the offering is arriving just as the private-growth story needs a public-market test.
First-order effects
- Facebook's management and its banks must submit IPO registration documents to securities regulators within roughly a month, starting the review clock that fixes the roadshow and pricing dates.
- Employees holding vested shares see their paper wealth move onto a realizable timetable, with the rumored $100bn figure setting expectations for what their equity is worth at listing.
Second-order effects
- Underwriters competing for lead roles on one of the most anticipated floats in years face a compressed filing schedule, sharpening fee competition and lock-in of syndicate positions now rather than later in the spring.
- A successful late-May debut at or near $100bn would reset the valuation bar for the consumer-internet companies waiting behind Facebook in the IPO queue, forcing them to justify their own pricing against it.
Third-order effects
- If the timeline holds, the filing will force full public disclosure of Facebook's revenue, costs, and growth rates — ending the era in which the company's economics were known mainly through leaks and secondary-market guesses.
- A float of this size landing on Wall Street's calendar would mark the structural return of the mega-listing as the endpoint for scaled consumer-internet companies, with regulators and index funds alike having to absorb a firm of this weight at once.
The trend: Scaled consumer-internet companies are crossing from private growth into public-market scrutiny on an exchange-driven timetable, with Facebook's filing window acting as the bellwether for the whole 2012 class.