Facebook’s roadshow for its initial public offering is scheduled to begin next week, and the shares should begin trading around May 18. The Company amended it’s S-1 registration filing, and is awaiting effectiveness. Facebook, the world’s largest social network, is set to raise at least $5 billion.
Facebook’s first quarter results showed a dip in quarterly revenue and a year-over-year drop in net income. Net income for the quarter was $205 million, down from $233 million in 2011’s first quarter. The total costs rose to 64% of all revenue, from 47% the year before. (See MarketWatch)
However, this has not thwarted investor interest. The recent acquisition of Instagram for $1 billion in cash and stock as well as the purchase of a number of patents from Microsoft keep the earning potential of this company in the forefront of potential investors’ minds. And the number of users are still growing. The company had 901 million monthly active users as of March 31, up from 845 million as of the end of 2011.
So if you still believe a company that doesn’t have a traditional “product” to sell, doesn’t have a storefront and doesn’t meet the traditional metrics of valuation schema, could not possible survive and strive, take note that Facebook was just valued at $103 billion- before going public.
Facebook is listed on Nasdaq under the symbol “FB”
Author: Jennifer Trowbridge, Stoecklein law Group