There is every chance that can delay an IPO of Facebook for 2012 as learned by Bloomberg from three sources familiar with the matter. By the IPO schedule change, Mark Zuckerberg – CEO, will get more time to gain users and accelerate the sales which in turn can pay back with higher share value at time of launch.
This comes with no surprise that despite of various criticism on security issues with Facebook, Mark has always been very careful on the subject. In his recent comments, few days back, he said “At some point along the path, I think it’ll make sense to have an IPO. But we’re not running the company to do that. We’re running the company to serve more people,”.
If Bloomberg’s report to be believed, it will only benefit Facebook from another year of growth absent the added scrutiny that comes with a public listing, instead of holding an IPO in 2011 as investors speculated, said the people, who asked not to be identified because Facebook doesn’t discuss share-sale plans. Still, Zuckerberg, who holds board control, could push for a stock sale at any time, they said.
Facebook’s IPO has been talk of the town from last few years among the investors and potentials buyers. With the company’s revenue and valuation is on growth path swiftly, it’s poised to become next Google, whose public initial offering was widely successful, with the company increasing its market capitalization fivefold over the coming years.
From the investors point of view, it may be the best time when they can expect the best returns on their equity. Startups are often urged to sell shares by employees and in Facebook’s case, some of that pressure has been allayed by private sales, often facilitated by such exchanges as SecondMarket Inc. and SharesPost Inc., which help find buyers for startup shares.
But Mark is going through various set of challenges which are bounding him to be very precautions before going to public. With the growing competition from Twitter, a micro blogging service, which has amassed over 190 million visitors per month, it is important for Mark to find the new ways to keep their users interested. Management of constantly increasing work force is another internal challenge for him as he holds control over board in Facebook Inc. On the other hand Facebook is still bleeding on users data security issues from last couple of months. Not to be end, with the latest news from sources that Google is gearing up to launch another social networking website, Mark may be going through sleepless nights.
“There’s definitely the market demand and appetite for a very successful IPO,” said Hollifield, who works with venture capital firms and startups. “Facebook’s IPO is going to be a huge watershed for the whole Valley.”