Facebook may be forced to IPO by April 2012

7 Jan 2011

With its US$50bn valuation and fresh round of investment, Facebook has disclosed it will begin disclosing financial information or go public by April 2012.

The company said it also plans to increase the number of shareholders it has above 500 this year as part of its private placement agreement.

CEO Mark Zuckerberg (26), who has amassed a tidy US$9bn personal fortune, has said he is in no rush to go public.

However, the pressure of a private placement in the past has driven industry giants Microsoft and Google to the public markets and it is inevitable Facebook will follow.

Goldman Sachs is offering as much as US$1.5bn in a private placement and this has attracted frenzied interest from Goldman’s hand-picked clients.

Facebook’s US$50bn valuation

Earlier this week, Facebook raised US$500m in new funding, valuing it at US$50bn, consisting of US$450m from Goldman Sachs and US$50m from Digital Sky Technologies.

Under SEC rules, firms that have more than 500 investors – Facebook says it has fewer than 499 – are obliged to publish financial information in order to protect investors.

At that stage, companies like Microsoft and Google have in the past concluded they may as well be publicly listed entities.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years