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|Facebook to go public, raise $5B|
|February 02, 2012, 05:00 AM By Barbar Ortutay and Michael Liedtke The Associated Press|
NEW YORK — Facebook made a much-anticipated status update Wednesday: The Internet social network is going public eight years after its computer-hacking CEO Mark Zuckerberg started the service at Harvard University.
That means anyone with the right amount of cash will be able to own part of a Silicon Valley icon that quickly transformed from dorm-room startup to cultural touchstone.
If its initial public offering of stock makes enough friends on Wall Street, Facebook will probably make its stock-market debut in three or four months as one of the world’s most valuable companies. Facebook, which is now based in Menlo Park, Calif., hopes to list its stock under the ticker symbol, “FB,” on the New York Stock Exchange or Nasdaq Stock Market.
In its regulatory filing with the Securities and Exchange Commission, Facebook Inc. indicated it hopes to raise $5 billion in its IPO. That would be the most for an Internet IPO since Google Inc. and its early backers raised $1.9 billion in 2004. The final amount will likely change as Facebook’s bankers gauge the investor demand.
Joining corporate America’s elite would give Facebook newfound financial clout as it tries to make its service even more pervasive and expand its audience of 845 million users. It also could help Facebook fend off an intensifying challenge from Google, which is looking to solidify its status as the Internet’s most powerful company with a rival social network called Plus.
The intrigue surrounding Facebook’s IPO has increased in recent months, not only because the company has become a common conduit —for everyone from doting grandmas to sassy teenagers— to share information about their lives.
Zuckerberg, 27, has emerged as the latest in a lineage of Silicon Valley prodigies who are alternately hailed for pushing the world in new directions and reviled for overstepping their bounds. In Zuckerberg’s case, a lawsuit alleging that he stole the idea for Facebook from some Harvard classmates became the grist for a book and a movie that was nominated for an Academy Award last year.
Following the model of Google co-founders Larry Page and Sergey Brin, Zuckerberg set up two classes of stock that will ensure he retains control as the sometimes conflicting demands of Wall Street exert new pressures on the company. He will have the final say on how nearly 57 percent of Facebook’s stock votes, according to the filing.
Even before the IPO was filed, Zuckerberg was shaping up as his generation’s Bill Gates — a geek who parlayed his love of computers into fame and fortune. Forbes magazine estimated Zuckerberg’s wealth at $17.5 billion in its most recent survey of the richest people in the U.S. A more precise measurement of Zuckerberg’s fortune will be available once the IPO is priced and provides a concrete benchmark for determining the value of his nearly 534 million Facebook shares
The IPO will also mint hundreds of Facebook employee as millionaires because they have accumulated stock at lower prices than what the shares are liked to be valued at on the open market. Facebook employed 3,200 people at the end of last year.
Depending on how long regulators take to review Facebook’s IPO documents, the company could be making its stock market debut around the time that Zuckerberg celebrates his next birthday in May.
The IPO filing casts a spotlight on some of Facebook’s inner workings for the first time. Among other things, the documents reveal the amount of Facebook’s revenue, its major shareholders, its growth opportunities and its concerns about its biggest competitive threats.
The documents show, as expected, that Facebook is thriving. The company earned $668 million on revenue of $3.7 billion last year, according to the filing. Both figures nearly doubled from 2010.
“The company is a lot more profitable than we thought,” said Kathleen Smith, principal of IPO investment advisory firm Renaissance Capital.
Although she considered Facebook’s numbers “very impressive,” she said Facebook needs to talk more about where it sees its growth coming from.
“What new areas of business is it expecting to pursue beyond display ads?”
What’s not in the documents, yet, is Facebook’s market value. That figure could hit $100 billion, based on Facebook’s rapid growth and the appraisals that steered investors who bought stakes while the company was still private.
Facebook heads a class of Internet startups that have been going public during the past year.
The early crop has included Internet radio service Pandora Media Inc., professional networking service LinkedIn Corp. and daily deals company Groupon Inc. Most of those Internet IPOs haven’t lived up to their lofty expectations. The list of disappointments includes Zynga Inc., which has built a profitable business by creating a variety of games to play on Facebook. Zynga’s stock fell 5 percent below its IPO price on the first day of trading.
Facebook stands apart, though. As it rapidly expands, people from Silicon Valley to Brazil to India use it to keep up with news from friends and long-lost acquaintances, play mindless games tending virtual cities and farms and share big news or minute details about their days. Politicians, celebrities and businesses use Facebook to connect with fans and the general public.
It’s becoming more difficult to tell whether going to Facebook is a pastime or an addiction. In the U.S., Facebook visitors spend an average of seven hours per month on the website each month, more than doubling from an average of three hours per month in 2008, according to the research firm comScore Inc.
More than half of Facebook users log on to the site on any given day. Using software developed by outside parties — call it the Facebook economy — they share television shows they are watching, songs they are playing and photos of what they are wearing or eating. Facebook says 250 million photos alone are posted on its site each day.
To make money, Facebook sells the promise of highly targeted advertisements based on the information its users share, including interests, hobbies, private thoughts and relationships. Though most of its revenue comes from ads, Facebook also takes a cut from the money that apps make through its site. For every dollar that “FarmVille” maker Zynga gets for the virtual cows and crops it sells, for example, Facebook gets 30 cents.
For all of Facebook’s success, the company has had its share of troubles. It went through a series of privacy missteps over the years as it pushed users to disclose more and more information about themselves. Most recently, the company settled with the U.S. Federal Trade Commission over allegations that it exposed details about people’s private lives without getting legally required consent. And the legal fights over Facebook’s origins have been embarrassing and sometimes distracting, though Zuckerberg has consistently denied allegations that have depicted him as a ruthless weasel.
Zuckerberg has made it clear he isn’t especially keen on leading a public company. He has said many times that he prefers to focus on developing Facebook’s products and growing the site’s user base, rather than trying to hit quarterly earnings targets in an effort to keep investors happy.
In a letter included in in Wednesday’s filing, Zuckerberg paints a rosy, idealistic picture of Facebook.
“Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries,” he wrote.
Zuckerberg also pledged to stay true to Facebook’s scrappy roots even on the road to becoming a multinational corporation.
“The word “hacker” has an unfairly negative connotation from being portrayed in the media as people who break into computers,” he wrote. “In reality, hacking just means building something quickly or testing the boundaries of what can be done.”
Lately, Zuckerberg has matured into the role, said Scott Kessler, a Standard & Poor’s equity analyst who follows Internet stocks.
“Clearly he is a very smart and shrewd person,” he said.
Zuckerberg has surrounded himself with other savvy executives, who are often more experienced. They include Chief Operating Officer Sheryl Sandberg, who helped build Google’s advertising business before Facebook lured her in 2008. Facebook’s finance chief is David Ebersman, a former executive at biotech firm Genentech.
Amid the buoyant optimism about Facebook’s prospects as a public company, some analysts see troubling parallels to the dot-com boom of the late 1990s, which turned into a devastating bust in the early 2000s. The biggest fear is that some investors will become so enamored with Facebook’s brand and brawn that the will try to buy the IPO share with little financial analysis or recognition of the risks.
“It’s a one-day circus,” said John Fitzgibbon, founder of IPOscoop.com.
The IPOs of Zynga and LinkedIn showed that success isn’t guaranteed even for profitable companies with huge followings. Zynga’s stock is currently trading just slightly above its IPO price. LinkedIn is considerably higher, but still far below the $122.70 record that it hit on its first trading day.
Liedtke reported from San Francisco.
Wednesday, October 5, 2011
Brother Barack. I call you brother because I choose to look past your position and look at the person I feel you are. I can only imagine coming in to work with all the proposals, issues, and security matters you face on a day to day basis. However you have managed to stay strong and face the daily adversity pretty darn good so I salute you on that. I’ve buckled under the pressure of making sure the coffee I’ve made for the office is just right for everyone. So I know if I had to try making everyone happy in the country I would be a breaking news story, “This just in President Hawkes found naked on 95 barking at cars, we’ll have more details as soon as we get them.” Just saying.
Now I have not been totally on your bandwagon as most black folks have been. I don’t defend you every time someone comes out and says disparaging comments about you or claim that anyone (white) that doesn’t support your efforts are doing so because they’re racist. The reason being is because I’ve always been a skeptic of Politics. To me it’s the highest stage of acting and positioning for economical power, but when you ran for the seat of the highest position known to man I jumped on board. Now black folk will not admit this in public, but when Obama ran and won, we had visions of black people taking over and it seemed that way in the beginning. Come on Son! There were cook-outs on the White House lawn, pick-up games on a basketball hoop set up in the back, things were looking good, but then the honeymoon was over and sadly we realized that our country was in more of a mess than we initially knew. And that’s when the undertones of bigotry started to come out or so we perceived.
There have been pictures of you as a dictator, The Joker, Curious George the monkey (which no one could deny is straight racist) and many more I cannot name, but the major attack on you is you’re a Socialist and have an agenda of enforcing government’s big hand on the people. I don’t buy this ideology of you because as a person of color who’s been a part of the many who has benefitted from government assistance, I know how helpful this assistance can be when in need. Of course you have those (not just people of color) who finagle the system and made it a mockery of what it’s supposed to provide for people, but that kind of hustle is not limited to those in the lower class of the economical scale. Take time out to read this article from Huffington Post and you realize the upper class set the standards for hustling the system, but I digress. I too had my concerns about where you were leading this great country of ours, but then a discussion with my brother led me to think of your situation in a totally different way. Maybe you’re just the CEO of the United States.
Now if you think about this it makes total sense. He can implement ideas make hard decisions, but he’s only the top player in a major operation, he’s the in between guy for the government and the people. So in essence his not in total charge, but his job is very important. Can you totally say that a person in a position for a possible maximum time of 8 years really control this country? I don’t think so; you know how long it takes for bills to go through a process and become a law? And when a bill is passed by the time it takes effect the President in office at the time is long gone enjoying retirement. George W. has been gone for almost a full term and a lot of the laws passed during his tenure are still going on I find it quite interesting. So what is really going on here?
I don’t know, but this way of thinking has me saying let’s ease up on the President and start working on our representatives in Congress or as they call in businesses, the board of supervisors. For some reason we over-look these guys and go straight to the face of the operation. Barack is that face for know and I have to say he appears friendlier, more approachable than any other President other than Bill Clinton who for some reason was ordained the first black President, okaaaaaaay?!But I’m here to say brother Barack I apologize and sort of understand what is taking place with you and your members. I stand behind you and your efforts to help right the ship of America. I find it ironic and somewhat funny that at a time when America’s credit defaulted it was a man of color who holds the seat of Leader of a Free Nation. I feel for you man, because I truly believe you came into this position with good faith only to realize that the fight ahead truly would take more than you could imagine your hair is grayer, the creases in your face are a little deeper, but at least you got that fine woman and little ladies to come home to when you’re beat down and tired. So keep your chin up like you’ve been doing and forget the haters, because in the end your retirement package will be sweeter than McDonald’s ice teas. LATER!!
Wednesday, September 28, 2011
What up nuts??? Ahhhh!!! I have awakened from a long nap and had to get back to what started the whole A Splash of Circus Peanuts movement… my writing. Well I’m back and have decided that the best way to get back into the swing of things is to start with a subject that is controversial as well intriguing and fascinating. POLITICS!!!
Our President, Barack Obama and his constituents are busy at Capitol Hill trying to make our society a better place to live in. They all understand that the major concern for Americans is MONEY and depending where you fall on the scale you’re either in favor of keeping more of your money, making more money, or finding a job to get money. But no matter what your situation is money is the factor it always has been. Now I’m not going to throw out numbers, graph charts, or polls, but all you have to do is have a pleasant conversation with any American and the economics subject tends to come up and most of the time there’s not a positive view about it. America has always been proud about its status in the world and how we manage to always persevere during times of need. September 11 is a common, monumental moment most Americans pull from to say “We can take a punch a keep fighting!” well that was a fight against terrorism on our lands, but what about our pockets?
Many believe that Obama is a socialist, wanting to man-handle the wealthy by using the government to share their wealth amongst the masses. Now if I stand corrected, Obama has a plan that would raise taxes on those who are considered rich/wealthy and throw it in a pot for the country in a whole. Many reports state that the average wealthy individual (that’s funny to say) tax percentage pales in comparison to the middle-class folk. This is an argument most Democrats have used since I have been watching politics and not surprisingly an argument many middle-class, minorities agree with. I for one understand this philosophy of raising taxes on the wealthy to a percentage where its comparable to what those of lower economical statuses pay, but there’s no way doing so would help the economy, that’s my opinion. It may help on righting the ship, but it will not bring us out of the hole.
On the other hand we have those who feel that our government is acting in a Capitalistic manner where money is for the taking and if you are the poor few who cannot attain it then shame on you. One thing I do notice about Americans is we are more than ready to get as much capital in our bank accounts as we can. You heard the phrase, “It’s the American Way!” and to be honest Capitalism is one of America’s way of living. Have you ever visited Manhattan? Every building is covered in advertisements, making you feel that you need at least one of the products being advertised. Studies have shown that your brain subliminally takes in every bullet point advertisement you visually see while walking, running errands, internet surfing, on route to work, etc. I’ve spoke on this before but count how many advertisements you see when you’re driving or on the internet and you’ll be amazed. This is however, a form of Capitalistic thinking and its growing more and more by the years. I think our society is working in both a little Socialistic and Capitalistic approach to living and it has been this way for years even with their contradictory philosophies and that’s the insane part of how it all works.
The Socialism part of our society is the welfare systems that have been put in place by the government since the 1930s. Welfare was originally meant to help those with financial strains for a short period of time. However, as many can attest the welfare system has been vilified by many and has numerous more in waiting to join in the fray. Who pays for this government support? Well Americans that aren’t on welfare of course. Now I now everyone has their opinion on welfare, but the bottom line is when used the way its suppose to be used welfare can provide temporary assistance for those who are truly in need and trying to get their lives back in order. But those crazy loop-holes in the system have made it a lifestyle many are comfortable with and chose not to leave. I would like to see a show of hands of how many people in middle and high economical classes turn down free months worth of food, $5 dollar rent, and free health care? Riiiiiiggghht! Now I understand that many of those who abuse welfare have a mentality that produces some negative stereotypes, but whom else is going to fill all those jails? This brings me to the Capitalistic side of our society.
In the United States, the concept of prison privatization was first proposed early in the 1980s. By the middle of that decade a number of firms were established, eager to take over prison and jail facilities and to build new prisons to tap into the needs of states that were struggling with rapidly expanding prison populations and deteriorating conditions in their existing facilities. To me this move gave a true example of our societies Capitalistic way thinking. Who came up with the idea that locking people up could be profitable and what was their sales pitch like? Did they use a slide show or small model of a prison with little gates, guards, and prisoners walking around doing prison activities? Either way it was proposed and accepted which leads me to my last paragraph, Selling!
In today’s world you have to be able to sell something whether it’s a plan, an idea, or yourself. America is also the land of major consumption we’ll buy anything that either makes our lives somewhat happy. But now that money is an issue and causing a major wavering effect in our country’s happiness, who do we look for to lead us out of this demise? With the 2012 elections coming, the selling point for both parties is what we can do with your money. I’ve heard all kinds of plans for tax cuts, breaks, and raises, but none that would help the country at a whole. Republican wants to stop the access that they feel the government is trying to have in Americans lives except of course for the ever-growing expenditures for defense and national security which spends more U.S. money. Democrats, want government to exercise its power on help everyone, but have recently push the Bush taxes benefitting the same upper-class people they’re trying to tax more money out of so who should you go with?
Well I suggest doing your homework NOW! Don’t wait until the elections which are all about selling the major key points that swing votes get at the grass roots of the problem. Check out the history of each candidate and make a sound decision for yourself because not only is our well being at stake, so are our wallets. LATER!!!
NEXT TOPIC: Brother Barak!!!