An official registration for an initial public offering has yet to emerge and yet everyone is talking about a Facebook IPO as if it’s a sure thing.
No one at the company will say anything other than Facebook’s official stance on the issue, as summed up in a quote from spokesman Larry Yu, “We’re not going to participate in speculation about an IPO.”
So with no on-the-record sourcing for the alleged IPO target of spring 2012, let alone any documentation showing such a plan is underway, we have a hard time calling this anything other than a rumor.
The three-letter acronym doesn’t jibe with what the company’s own Chief Executive Officer Mark Zuckerberg has said about not wanting to go public, not to mention the years spent in litigation keeping claimants like the Winklevoss twins and Paul Ceglia from diluting ownership of the company.
All of this IPO talk has left out a much more imminent deal by Facebook’s top developer, Zynga, which had been expected to go public by the end of this month but now seems like it might not this year.
Of course, tt’s still possible that Zynga might go forward with the IPO before the close of the week. The strong opening day performance of recent deals like Groupon and LinkedIn would support a possible capital market debut of the leading social game company. While these shares lost value after going public, those losses would be felt more by the investors and employees rather than as dent to corporate fundraising.
Meanwhile, November’s almost over and we haven’t heard a thing about a date for bankers to price Zynga shares. So if Zynga’s not rushing forward with its IPO, why should Facebook make any concrete plans?
Facebook’s share price has been going down in the last series of private market auctions, so issuing any additional stock would likely add additional downward pressure to that pricing.
Time could turn this trend around, of course. The longer the social network waits before tapping the public markets, the more money an eventual deal could sand to raise. But Facebook doesn’t even have to go public at all to raise money and provide liquidity to employees, given how the private markets continue to evolve.
Additional legislative proposals recommended to Congress by the Securities and Exchange Commission would make it possible for Facebook to sell shares privately without having to make any financial disclosures to the public.
People have a hard time fathoming a growth trajectory that bypasses the public markets, and as long as that disbelief continues, so will the rumors that a Facebook IPO is imminent.
Readers, when do you think Zynga will go public?
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