Facebook has recently announced that it will be doing their IPO (initial public offering, which means it will be offering its shares to the public for the first time through the stock market).
Some estimate the value of the company to reach as high as $100 billion. How can that be?
Here are some interesting details included in their IPO filing (in which they had to include some information previously not officially available to the public):
For 2011 it generated $3.8 billion revenues and $1 billion profit. Unsurprisingly, 85% of revenues were from advertising which reached over 800 million total Facebook users, of which over 400 million are daily users (read other details taken from a BBC News article).
Founder Mark Zuckerberg, being the single largest shareholder with 28% of total shares, is no doubt a billionaire many times over. How many times over will depend on the actual price when the shares start selling in the stock market. Analysts apparently estimate the value of Facebook to be anywhere between $65-100 billion. Not bad for a ‘startup’ that was founded in a dorm room in 2004.
You easily can do the math on the wealth of Zuckerberg, who is just 28. An article in CNN quotes someone who estimates that the IPO will create 500-1000 new millionaires. But many of them aren’t rocket scientists nor software engineers. According to a New York Times article, David Choe, an artist who painted the walls of Facebook’s first headquarters and opted to receive shares instead of cash, will be worth about $200 million.
That, we definitely like!