A Facebook Initial Public Offering is all the talk of the investment world with a possible valuation of $50bn, roughly the same market cap as Tesco or a fifth of Microsoft. A few commentators are even predicting a dot com boom version 2 as a result. However, the real life plot is thicker than any movie's. Facebook founder and largest individual shareholder, Mark Zuckerberg, who owns almost quarter of the firm, often pours cold water on the prospects of a float. His attitude might best be summed up as 'list in haste, repent at leisure'.
But some commentators believe it may be out of his and other shareholders' hands.
Those shareholders make quite a list. They include the Facebook staff with 30 per cent. Microsoft itself has a 1.6 per cent share, a legacy of having tried to buy the firm a few years back. LinkedIn founder Reid Hoffman, who may also be on the IPO trail, has some stock as does Hong Kong billionaire Li Ka-Shing and US senator Barbara Boxer. Even U2 lead singer Bono owns 1.5 per cent through his Elevate investment vehicle. His share cost $210m but has achieved a vertigo inducing fourfold return - on paper at least.
If you have a couple of million dollars spare, you can get a piece of the Facebook action too, provided you agree not to sell the shares until 2013, with Goldman Sachs creating a special investment vehicle for the purpose. Goldman itself now has 0.8 per cent and helped organise Russian firm Digital Sky Technologies' purchase of 10 per cent for $500m, hence the $50bn valuation. But that is also the problem.
In what might be described as informed speculation, some analysts believe that the US Securities and Exchange Commission in the US could force an IPO. Analysts think Facebook may be falling foul of SEC rules or at least sailing very close to wind. Here is FT Alphaville on the issue. The Wall Street Journal inquiry is also scenting an inquiry covering the whole tech sector and the secondary market.
SEC RULES
Under SEC rules, if you have more than 499 share holders you must go public. However, Facebook was given special dispensation in 2008 because, it argued, many shares are owned by its staff. Indeed, retort the analysts, but Goldman has effectively set up a special purpose vehicle…
