Facebook IPO Coming In 2012, Could Be Worth $100 Billion

Everyone knows that Facebook is going public. When was the only question. Now it appears that it will be early next year.

Facebook apparently is being compelled go public by an obscure SEC rule that requires companies with 500 or more shareholders to start disclosing financial information even if they haven’t gone public. Thus Facebook wants to “get out ahead” of this requirement and have its IPO before it’s forced to start reporting earnings publicly.

Giving Employees a Chance to Cash Out

CNBC speculates that Facebook also wants to enable restless employees to “gain some liquidity,” given Facebook’s restriction on employee option sales right now (to avoid the “500 rule”). Accordingly, there’s an apparent “perverse incentive” to leave the company to realize the value of employee options in the private market.

But after key employees are made super-rich (or 2X super-rich if they were part of Google’s IPO) Facebook may also see some people exit to become investors or to self-fund new startups. We’ll probably see a Facebook “S-1” form later this year that will offer the first real information about revenues, estimated to be approaching $4 billion this year.

My prediction is that Mark Zuckerberg (though very Larry Page-like) will probably not like or want the duties of public company CEO and ultimately give that role to Sheryl Sandberg. Alternatively he could delegate many of the public and investor-facing duties to Sandberg, who’s more diplomatic and polished than Zuckerberg.

Demand for Growth, Revenues

The pent up demand for Facebook’s IPO is so large that the company could be valued at well over $100 million when shares start trading. But there will be pressure to justify the valuation with revenues and not just revenue potential. That means a bucket of new monetization scenarios or turning up the volume on existing ones.

As Facebook approaches 700 million users globally (and seems unstoppable) one worrying statistic has emerged.

It was reported earlier that Facebook has seen some attrition and erosion in its most mature markets. However it’s way to early to call this a trend. If it continues months from now Facebook might have a problem on its hands. However metrics like daily frequency and page views are as important or more important than overall uniques.