Please download Flash from the Adobe download website.
12:54am UK, Thursday February 02, 2012
Facebook has filed paperwork to go public, seeking to raise $5bn (£3.1bn) on Wall Street in the largest flotation ever by an internet company.
In its filing with the US Securities and Exchange Commission, Facebook reported a net profit of $668m (£421m) last year on revenue of $3.7bn (£2.3bn).
The world’s largest social network had previously been expected to raise $10bn in what would have been the fourth-largest IPO (initial public offering) in US history, after Visa Inc, General Motors, and ATT Wireless.
But Facebook’s hopes of raising $5bn (£3.1bn) would be the most for an internet IPO since Google and its early backers raised $1.9bn (£1bn) in 2004.
The final amount is likely to change during the next three to four months as Facebook’s bankers gauge investor demand.
The world’s largest social network launched eight years ago and was created by Mark Zuckerberg in his dormitory room at Harvard.
The global internet phenomenon has more than 800 million members worldwide.
In a letter accompanying the documents, Mr Zuckerberg said: “Simply put: we don’t build services to make money; we make money to build better services. And we think this is a good way to build something.
“These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.
Creator Mark Zuckerberg
“By focusing on our mission and building great services, we believe we will create the most value for our shareholders and partners over the long term – and this in turn will enable us to keep attracting the best people and building more great services.
“We don’t wake up in the morning with the primary goal of making money, but we understand that the best way to achieve our mission is to build a strong and valuable company.
“This is how we think about our IPO as well. We’re going public for our employees and our investors. We made a commitment to them when we gave them equity that we’d work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment.
“As we become a public company, we’re making a similar commitment to our new investors and we will work just as hard to fulfill it.”
Facebook’s long-awaited submission kicks off a months-long process that will culminate in Silicon Valley’s biggest coming-out party since the heyday of the dotcom boom and bust.
The company has appointed Morgan Stanley, Goldman Sachs and JP Morgan its lead underwriters.
Sky News reporter Hannah Thomas-Peter in New York said: “It is interesting that Facebook’s value comes from sharing and knowing a lot about its individual users, but there is a sharing of a different type that is going to have to go now that Mark Zuckerberg and Facebook want to be public.
“They have investors and shareholders that they have obligations to and it means opening the doors to a previously secretive company.
“They will now be under obligation to tell people about their growth, spending, their profits and losses.”