Facebook seeking to raise $5 billion at IPO, provides data on revenues, users

Posted:
in Mac Software edited January 2014


Facebook 's Initial Public Offering registration outlines that the company earned $3.7 billion in revenues last year and made $1 billion in profits. The company hopes its IPO will raise $5 billion.



As a privately held company, Facebook hasn't previously had to report its figures. Now that it has filed for an IPO, it's public knowledge that the company's revenues grew by 88 percent last year while its profits were up 65 percent over 2010.



The filings note that Zynga games' virtual currency and advertising made up 12 percent of Facebook's revenue and warned, "if the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected."



The company's net profit margins are 27 percent, just ahead of Google, which reported 26 percent net profits.



Zuckerberg claims "Facebook exists to make the world more open and connected, not just to build a company"



Facebook's founder Mark Zuckerberg wrote in a letter accompanying the filing that "Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.



"We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do. I will try to outline our approach in this letter."



Zuckerberg continued, "At Facebook, we build tools to help people connect with the people they want and share what they want, and by doing this we are extending people’s capacity to build and maintain relationships.



"People sharing more — even if just with their close friends or families — creates a more open culture and leads to a better understanding of the lives and perspectives of others. We believe that this creates a greater number of stronger relationships between people, and that it helps people get exposed to a greater number of diverse perspectives."



Failing to be "open and connected" with Apple in order to build a business



At the same time, Facebook clearly intends to maintain control over how it forms connections and embellishes the culture in a profitable way. The company notoriously fought with Apple over its attempts to include Facebook connections in its iTunes Ping service, and was later reported to have blocked Apple's initial efforts to integrate Facebook into iOS 5 in a manner similar to the Twitter integration Apple did deliver for both Ping and iOS 5.



Jobs described Facebook as demanding "onerous terms that we could not agree to" before the social network pulled out of its partnership with Apple on Ping, although it was later reported that Jobs later met with Zuckerberg in an informal setting to discuss the matter further just prior to Jobs' passing away.











Last summer, Facebook also developed an iPad app that it then refused to officially release, resulting in its lead developer, Jeff Verkoeyen, leaving the social network out of frustration. When the code did leak as part of the iPhone app, Facebook blocked access to it from its servers.



Several reports suggested that the company held the iPad app as leverage in negotiations with Apple, indicating that the company threatened to throw its efforts behind a web app version instead. In parallel, Facebook also worked with HP to release a native, integrated app for the firm's failed webOS tablet.



Facebook eventually released its iPad app shortly after Jobs passed away. The company released the app without support for "Credits," a virtual currency that violates Apple's policies for App Store titles.











Nearly 850 million users



Facebook's filings also revealed that in December it had 845 million active users within the month and 483 million active users on a daily basis. Daily active users are up 48 percent over a year ago.









The company notes that these numbers "are reasonable estimates, and we take measures to improve their accuracy, such as eliminating known fictitious or duplicate accounts. There are inherent challenges in measuring usage across large online and mobile populations around the world. For example, there may be individuals who have multiple Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behavior. As another example, applications on certain mobile devices may automatically contact our servers for regular updates with no user action involved, and this activity may cause our system to count the user associated with such a device as an active user of Facebook."



The company also recounted servicing 100 billion "friend" connections between users, 2.7 billion "likes" and comments per day and a quarter billion photo uploads per day in the winter quarter.



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Comments

  • Reply 1 of 31
    I am highly tempted to short Facebook after the IPO.



    Just wait for the nonsensical share price run-up, then short.
  • Reply 2 of 31
    Quote:
    Originally Posted by cvaldes1831 View Post


    I am highly tempted to short Facebook after the IPO.



    Just wait for the nonsensical share price run-up, then short.



    I was thinking the same.
  • Reply 3 of 31
    jason98jason98 Posts: 750member
    Quote:
    Originally Posted by cvaldes1831 View Post


    I am highly tempted to short Facebook after the IPO.



    Just wait for the nonsensical share price run-up, then short.



    There are lot more better gambling opportunities, IMHO.

    It is just too risky to predict the peak price. The buying craze may last for weeks till it finally settles and starts its inevitable fall.
  • Reply 4 of 31
    Wanna know what's better than a billion dollars?



    5 billion dollars...
  • Reply 5 of 31
    Quote:
    Originally Posted by jason98 View Post


    There are lot more better gambling opportunities, IMHO.

    It is just too risky to predict the peak price. The buying craze may last for weeks till it finally settles and starts its inevitable fall.



    Ah, it wouldn't be a long-term short. I just want it to drop 10-15% in a couple of weeks (or days), then I'd pull the plug.



    I know there are better gambling opportunities, but FB looks like a no-brainer for a really quick short. I'm certainly not betting the farm on FB. But if I can walk away with a couple of grand (pre-tax) in a week or two, I think it's worth it.
  • Reply 6 of 31
    irelandireland Posts: 17,095member
    Zuckerberg is full of shit.



    Quote:

    "Facebook exists to make the world more open and connected, not just to build a company."



    He's a self-deluded idiot who runs a glorified ad network.
  • Reply 7 of 31
    irelandireland Posts: 17,095member
    When can people buy shares?
  • Reply 8 of 31
    Quote:
    Originally Posted by cvaldes1831 View Post


    I just want it to drop 10-15% in a couple of weeks (or days),...



    ?or hours.
  • Reply 9 of 31
    Quote:
    Originally Posted by Ireland View Post


    When can people buy shares?



    The date field is blank in the S-1 filing. (Same with the price and quantity.)
  • Reply 10 of 31
    drax7drax7 Posts: 38member
    Quote:
    Originally Posted by Ireland View Post


    Zuckerberg is full of shit.







    He's a self-deluded idiot who runs a glorified ad network.



    What a smoke screen , they exist for the pure glory of it. Money hungry

    Con artist .
  • Reply 11 of 31
    Quote:
    Originally Posted by Ireland View Post


    Zuckerberg is full of shit.



    He's a self-deluded idiot who runs a glorified ad network.



    Quote:
    Originally Posted by Ireland View Post


    When can people buy shares?



    I love this juxtaposition, for some reason!
  • Reply 12 of 31
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by cvaldes1831 View Post


    I am highly tempted to short Facebook after the IPO.



    Just wait for the nonsensical share price run-up, then short.



    Quote:
    Originally Posted by monstrosity View Post


    I was thinking the same.



    I think $5 billion sounds reasonable. It's the $100 billion that was farfetched. I think this could work.
  • Reply 13 of 31
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by SolipsismX View Post


    I think $5 billion sounds reasonable. It's the $100 billion that was farfetched. I think this could work.



    You're confused about the percentage.



    Facebook is only selling a small portion of its shares - I haven't dug far enough to get the information from a good source, but what I've found suggest that they're only selling 5% of their shares - so $5 B for the IPO (for 5% of the company) EQUALS a $100 B valuation.



    (another source vaguely hinted that this would be for 10% of the company which would put the valuation at $50 B.
  • Reply 14 of 31
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by jragosta View Post


    You're confused about the percentage.



    Facebook is only selling a small portion of its shares - I haven't dug far enough to get the information from a good source, but what I've found suggest that they're only selling 5% of their shares - so $5 B for the IPO (for 5% of the company) EQUALS a $100 B valuation.



    (another source vaguely hinted that this would be for 10% of the company which would put the valuation at $50 B.



    Mea culpa. That's a major gaffe. \
  • Reply 15 of 31
    It has been reported that Zuckerberg may be worth $38,000,000,000.00 afterwards.
  • Reply 16 of 31
    Quote:
    Originally Posted by Ireland View Post


    When can people buy shares?



    You can buy them when they go on the market. Before that you can call a broker, but most of the shares will already be spoken for by the preferred clients of the underwriters.
  • Reply 17 of 31
    just_mejust_me Posts: 591member
    Quote:
    Originally Posted by cvaldes1831 View Post


    I am highly tempted to short Facebook after the IPO.



    Just wait for the nonsensical share price run-up, then short.



    You should
  • Reply 18 of 31
    irelandireland Posts: 17,095member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    It has been reported that Zuckerberg may be worth $38,000,000,000.00 afterwards.



    He should sell all of them right away, keeping only 1 share while laughing uncontrollably.
  • Reply 19 of 31
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    It has been reported that Zuckerberg may be worth $38,000,000,000.00 afterwards.



    Don't exaggerate. He's likely worth only $28,400,000,000.00 (given that he has a 28.4% share).
  • Reply 20 of 31
    solipsismxsolipsismx Posts: 19,566member
    I wonder how many shares the Winklevoss twins will buy.
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