Boston: Social networking site Facebook is likely to file an IPO by the first quarter of 2012, with a valuation of over $100 billion, a media report said.
Facebook is likely to go public by next spring, CNBC quoted people familiar with the matter as saying.
“The company’s IPO, were it to happen by next spring, would probably be triggered by a section of the 1934 Securities and Exchange Act known as ‘the 500 rule´,” which mandates that once a private company has more than 500 investors, it must begin releasing quarterly financial information to the Securities and Exchange Commission, just as public companies do, the report said.
Facebook has indicated that it expects to cross the 500-investor threshold this year.
“It would probably want to launch a formal IPO in advance of a public-company reporting obligation that would kick in next April,” the report said.
While Facebook chief executive Mark Zuckerberg has said he is in no hurry to take the social network public, the company’s chief operating officer Sheryl Sandberg had last month said a Facebook IPO was “inevitable,” describing it as “the next thing that happens”.
Another factor in favour of the IPO is that it will an enable increase in employee compensation.
Facebook had put curbs on employees’ ability to sell their company shares privately to other investors, the report added.
If the company were to go public, employees would be able to sell their stock on the open market at various times during the year, allowing them to cash in on their holdings.
The company is reported to be valued at over $50 billion at present.
Facebook had 687 million members at the start of June, as per estimates by the Inside Facebook website.