Facebook surrenders its privacy in IPO documents
Published: February 3, 2012 / Author: Michael Writer
The following is an excerpt from an article in The Associated Press that quotes Finance Professor Tim Loughran on Facebook’s initial public offering (IPO) of stock. To read the entire article visit: Facebook surrenders its privacy in IPO documents
Facebook is baring its business soul.
The unveiling came late Wednesday when the company that depends on people to share their lives online filed its plans to raise $5 billion in an initial public offering of stock. It’s a revelatory moment that prospective investors, curious competitors and nosy reporters have been awaiting for two years. During that time, Facebook established itself as a communications hub and emerged as a threat to the Internet’s most powerful company, Google Inc.
As with almost anything crafted by a bunch of lawyers and bankers, the 197-page prospectus that Facebook filed with the Securities and Exchange Commission is filled with boilerplate legalese and mind-numbing numbers.
But there were some juicy details in there, too.
Above all, the documents confirmed what everyone had been hearing: Facebook is very profitable and getting stronger. The company Mark Zuckerberg started with some friends in 2004 has seen its annual revenue soar from $777 million in 2009 to $3.7 billion last year. Facebook’s earnings have grown at a similar rate too, ballooning from $122 million in 2009 to $668 million last year.
Facebook ended 2011 with $3.9 billion in cash. That’s a relatively small amount compared to the nearly $45 billion that Google has in the bank.
The following article also appeared in over 300 other publications.