The Wall Street Journal, through its anonymous sources, reported on Friday that Facebook could “file papers for its initial public offering as early as this coming week.” The much-anticipated move is expected to put the company’s valuation between $75 billion and $100 billion, making it one of the biggest debuts for an American company.
Morgan Stanley is said to be close to leading the deal, with Goldman Sachs playing a “significant” role (details are not yet known). The timing allows the company (which will go by the two-letter ticker “FB”) to start trading by the end of May, “before the summer trading lull.”
As the filing approaches, questions have arisen about the implications for the tech world — and whether the company, in the long term, will end up as a massive disappointment. While recent IPOs like Groupon and LinkedIn were hyped and fizzled out, these companies are not entirely comparable to Facebook.
As many have pointed out, Groupon saw its shares sink below the original $20 IPO price. Similarly, Facebook-based gaming company Zynga also dipped and returned only to its original IPO price. Several recent tech IPOs have fallen flat, and many are wondering whether Facebook will live up to the hype — including Swiss researchers who are questioning whether the social network is already past its prime.
Facebook’s scope and reach, however, are vastly larger than these other tech companies, and it is likely to fare better. If the response to the IPO news is any indication, it may even do a little to help its tech peers (Groupon rose 2.6% on Friday, and LinkedIn shot up 5.9%).
Facebook COO Sheryl Sandberg, in a CNBC story, brought up a different angle from those getting the most media coverage: jobs. The best thing it can represent, she said, “is the kind of growth that creates jobs.”
She added that Facebook has 3,000 and has created 450,000 jobs in Europe and the U.S. As the world is looking for economic growth, Sandberg feels Facebook can be part of the needed changes — a grandiose vision, for sure.
Meanwhile, the IPO will reportedly create at least 1,000 millionaires, many of whom are already dreaming of how to spend their new wealth.
The hype surrounding Facebook will only to increase, as investors and the tech world wait to see if the company will live up to optimistic hopes.