Tag Archive | "Facebook IPO Date"

Facebook IPO Date


Speculation Mounts Regarding Facebook IPO Date

Facebook IPO DateAs of late summer 2011, nobody knows for sure what the Facebook IPO Date will ultimately be, but it appears that the Facebook Initial Public Offering (IPO) will likely occur in 2012.  This is because the United States Security and Exchange Commission (SEC) has a requirement that private companies with more than 500 private investors disclose financial information that public companies are required to disclose.  Facebook is expecting to have more than 500 private investors by the end of 2011, which would require Facebook to start publicly disclosing financial information by April 2012.  This may force Facebook management’s hand to go public with a likely Facebook IPO date in the spring of 2012.

There are other forces that may cause the Facebook IPO date to occur in the spring of 2012.  Many Facebook employees and early investors have built up sizable positions in Facebook’s privately held stock, but cannot convert their Facebook stock holdings into cash until Facebook’s stock is traded on a public exchange.  These Facebook employees and early investors are quietly pressuring the company to go public via an IPO.  The Wall Street manager and underwriter of the Facebook Stock IPO, Goldman Sachs, has strong incentives to bring Facebook’s stock to public markets via an IPO since they have considerable amount of money tied up in the Facebook Stock IPO deal.  Goldman Sachs wants to book their profits from the Facebook Stock IPO deal and wants to ensure that their favored clients also profit from the Facebook Stock IPO.  Facebook and Goldman Sachs are both run by very intelligent people who realize that they need to take advantage of the social networking craze that has propelled the Facebook Stock IPO to its highly sought after position.  If they wait too long to bring Facebook public via an IPO, they may miss out on obtaining the best market price for Facebook’s stock offering.  They also will want to bring Facebook public before the 2012 summer doldrums kick in and public interest in the stock market wanes.  All of these factors are pointing to a Facebook IPO Date in the spring of 2012.

What Could Delay The Facebook IPO Date

Nothing is certain in life, and the Facebook IPO Date is also not certain.  IPOs are delayed and even cancelled for a variety of reasons.  The primary reason a company delays or cancels an IPO is overwhelmingly negative market sentiment.  This does not include a few down days in the stock market.  It means a steep stock market selloff that causes market sentiment to turn so negative that trying to sell shares via an IPO is risky and could result in the shares selling for much less than they would be worth during a bull market with positive market sentiment.  Currently, the European debt crisis and potential for another United States and/or global economic recession are hurting stock market sentiment.  If the market returns to neutral or positive sentiment into the spring of 2012, the Facebook IPO Date will likely occur during that time.

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