Investors prepare for Facebook’s IPO

Steve Dinneen
Follow Steve
REID Hoffman, the founder of LinkedIn, expects Facebook to finally pull off its long-awaited IPO in the first half of next year.

Mark Zuckerberg’s (pictured) company is keen to cash in on the bumper demand for tech IPOs, with the social network expected to break every record in the book when it finally lists.

Its value has increased exponentially as investors salivate over the prospect of getting their hands on the golden stock. Some private share sales are said to have valued the company at $100bn (£63bn) and the Kingdom of Saudi Arabia has denied offering $150bn for the social network.

However, the float has been pushed back several times as the company waits for markets to settle and some analysts had expected Facebook to wait until the second half of 2012.

Hoffman, who cashed in when LinkedIn topped out its IPO price range, raising $743.4m and valuing the business at $4.25bn, says the time is almost right for Facebook to float.

Facebook’s hopes of attaining a sky-high valuation were boosted when it was revealed it had doubled its first half profits to $500m on revenues of around $1.6bn.

Facebook is now seen as one of the most important firms in the world to advertisers, with its ability to target ads to specific demographics making it a hit with global giants including WPP.

Facebook also gets a 30 per cent cut of sales of virtual goods, such as digital cars or animals, that enhance the experience in social games such as FarmVille.

In January, Facebook said it had raised $1.5bn from investors including Goldman Sachs and Digital Sky Technologies, as well as through a private offering to overseas investors conducted by Goldman Sachs.

Groupon beat the high-point of its price range in its IPO earlier this month – albeit at a lower price than it had initially hoped for – raising $700m in a float that valued it at $13bn.

It succeeds Yandex as the biggest tech IPO of the year, with the Russia social network achieving a market cap of $11.2bn in its IPO.