What started out as a bit of a joke in a dorm room at Harvard, has taken Mark Zuckerberg to the top of the world. Facebook’s IPO will be between $28-$35 a share. That puts the firm at a valuation of $77-96 billion.
The value is based on an assertive speculation that the company has large potential for raking in cash from many angles, not the least of which are ads and commerce.
One principal, Lise Buyer, from Class V Group, an IPO advisory company, declared that the shear size of this tech IPO has never happened before, to her knowledge. She admitted that it is a guessing game as to how much growth a company that has already gotten this big has ahead of it. She speaks from her experience with Google’s IPO eight years ago.
If you are worried the company will get spoiled, relax. Facebook itself is only grabbing a mere $5.6 billion of the $10.6 billion it is expected to obtain midway of the IPO. The rest is being kicked back to shareholders. If Wall Street is a bit colder or hotter than expected, the price range will be shifted a bit to accommodate it.
The excitement is high among investors, regardless of the crack in the dam, known as Zuckerberg. Yet, many are glad at least to see some range in the offering. Of course there are hopes to get in at the low end at $28.
The Facebook entourage will go peddling its wares from New York, to Boston, and on to Chicago. The circus starts on Monday and ends in Menlo Park California. Zuckerberg’s presence will grace all, but he will not be the star of the show. That is reserved for Sheryl Sandberg, COO, and David Ebersman, CFO.
Analysts are nervous about whether Zuckerberg can manage a long-term vision for the company and they are still in a bit of disbelief at its ability to make money. Zuckerberg’s presence will allay these concerns, but only because investors are a bit gullible.
There was a small slip in revenue last week, which had not happened for two years. Are these tremors foretelling the big fall or simply a glitch? That is what has investors curious.
Zuckerberg, true to form for the megalomaniacs who govern Internet giants, seeks nothing less than to rule the world. He swears that every program that exists will be tied into Facebook within the next five years. Where is Superman when we need him?
Facebook has been trying to hypnotize investors for a long time using the mantra of IPO. I guess it worked. Google raised only $2 billion in 2004, a pittance compared to Facebook’s $10.6 billion.
The questions are whether people believe there will be a return on their investments or not and who will be the suckers who buy the stock.