By now you probably know that Facebook filed its long-awaited IPO on Wednesday. What you may not know is just how ambitious the social network’s initial public offering is.
The company is targeting a range of between $75 billion and $100 billion in its IPO, which would make it one of the biggest U.S. stock-market debuts in history. Sources say the company is hoping to raise as much as $10 billion when it begins selling shares in May.
Among U.S. companies, only Visa (NYSE: V), AT&T Wireless (NYSE: T) and General Motors (NYSE: GM) have held larger offerings. The offering would more than quintuple the $1.9 billion rival Google (Nasdaq: GOOG) raised in 2004 – the current record for an Internet company.
Those are lofty goals for any company, and particularly high for an eight-year-old Internet company. Until yesterday, Facebook’s financials remained a mystery. Now that the company has filed its IPO, for the first time its numbers are available for public dissection.
With that in mind, here are some numbers investors should consider over the next three to four before deciding whether or not Facebook’s IPO is worth the investment:
- Facebook has an average of 845 million monthly active users.
- The company has $3.9 billion in cash.
- The company made $1 billion in profit in 2011 on $3.7 billion in revenues. If the company reaches its desired IPO range, that would put the stock at between 75 and 100 times earnings.
- The IPO could yield as much as $100 million in fees for the Wall Street banks that manage the offering.
- The company spent $114 million on research and development in 2011, up from $9 million the year before.
- 85% of Facebook’s revenue comes from advertising.
- The company is rumored to be aiming for a stock price of between $35 and $40.