Ah, Facebook. For our generation, it’s hard to imagine life without it and hard to remember a time when it didn’t exist. For the generation after us, that will become even increasingly difficult.
Last night, Facebook filed its long-anticipated initial public offering (IPO). In what will likely be remembered as one of the largest IPOs in history, Facebook is looking to raise $5 billion by going public.
An even more staggering number that has more zeros than the GDP of some countries is the total value of the social media giant: $100 billion. At least that’s what most analysts predict when the company will start trading in the spring.
The IPO is Facebook’s first step toward becoming a publicly traded company. It’s a long way from the company’s humble (or relatively at least) beginnings in Mark Zuckerberg’s Harvard dorm room only eight years ago.
For Facebook, that’s going to require some blunt honesty.
In order for the company to file with the Securities and Exchange Commission (SEC) and go public, Facebook is required to spill some beans about what exactly is going on at the company.
For a start, how about the fact that Zynga accounts for 12% of Facebook’s revenue in 2011? That’s right – FarmVille and Words With Friends generated Facebook over $500 million last year. That’s some serious cash.
However, for Facebook and future investors, that’s a pretty serious concern judging by how the two companies have had a somewhat rocky relationship in the past.
Indeed, Facebook in its SEC filing listed its partnership with Zynga is one of its 38 serious risk factors to the company’s revenues. Other factors include the lack of ads on Facebook mobile, competition from Google and Twitter, unsustainable growth and just simply running out of people on this planet to sign up for Facebook.
Going full-disclosure inevitably is bound to raise some eyebrows. Within just hours of the SEC filing, Mashable was already reporting on the fact that Facebook CEO Mark Zuckerberg had spent $700,000 on flying private planes last year (which is actually about $200,000 more than his own official annual salary.) To be fair, Zuckerberg has announced that in the style of Steve Jobs and Sergey Brin, he’ll be taking a $1 salary in 2013.
Don’t get too wooed over by Zuckerberg’s gesture just yet though. The one thing we know in excruciating detail from the entire IPO filing is just exactly how filthy rich that man is.
Of the soon-to-be $100 billion company, Zuckerberg owns 28.2% in shares, making him by far the biggest shareholder. Additionally, he also made almost $500,000 in salary in 2011 along with about $220,000 in bonuses which are both peanuts considering the man will be worth a likely $28 billion by the spring.
However, what’s even more noteworthy than Mark Zuckerberg or Sheryl Sandberg making their millions is the thousands of other Facebook employees who, because of the IPO, will be sharing in the wealth. And, if you’re lucky, you can too with some shares of FB stock.
What would you do with $100 billion? Will you or someone you know be buying Facebook stock in the spring? Let us know in the comments below!
Image Credit: Guillaume Paumier