Facebook rumoured to file for Initial Public Offering on February 02 or 03, 2012 – Part 1

After a long wait of almost a year since the first rumour sprung at the Pablo Alto, California head quarters, Facebook is planning to file for the Initial Public Offering at Securities and Exchange Commission on Thursday, February 02 or Friday, February 03. The filing will initiate the process of the social network’s net worth in US dollars and most probably the IPO will roll out in May or June, 2012.

There had been rumours that Facebook was eyeing a $10 Billion worth of initial stock, giving it an overall valuation of $100 Billion. However, recent developments in the news have revealed that the company is planning on a conservative offering of $5 Billion, to evade any risks.

SEC will start the process of initial auditing of the company right after the filing of request and a full audit reports will follow thereafter. The process, in normal circumstances, takes around three months to complete. Since Facebook has been clean in all respects, the process is unlikely to encounter any hindrance.

The reason behind the limited offering is to stir up a demand in the stock market. Menlo Park hopes that the dearth of stocks, which will eventually follow after the IPO announcement depending on the price per share, will increase the demand for Facebook, or FB as decided by the officials in Pablo Alto.

Moreover, Morgan Stanley has been allegedly favoured by the networking site and has already been the ‘Lead-Left’ position. Lead-Left is the position in prospectus where the top underwriter’s name appears, being the preferred broker. There are many other players in that category, namely Goldman Sachs, JP Morgan and Bank of America being some of the prominent in the roster.

However, the struggle for the best underwriter is not yet over. Goldman Sachs is turning every corner to win the battle or at least become the best among other firms.

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Posted by Usman Khalid on Feb 1 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.