Facebook IPO watch: The regulatory filing submitted by Facebook to the U.S. Securities and Exchange Commission (SEC) shows that Facebook has determined to get its common shares to list on the NASDAQ Stock Exchange, and probably puts off the listing date by a week due to the recent acquisitions. Regardless of the decline in the first quarter net profit, market analysts still remain optimistic on the Facebook IPO.
Facebook recently agreed to pay $1 billion to acquire the newly established picture sharing site INSTAGRAM, and it also spent $550 million in buying hundreds of patents from Microsoft. Market analysts predict if these acquisitions are successful, the Facebook IPO road show originally scheduled on May 7 and listing date scheduled on May 14 will be postponed.
This moment is the last sprint phrase for the Facebook IPO; according to the latest regulatory filing submitted on Monday to the U.S. SEC, the company’s net profit was $206 million, a decrease of 12 percent compared with $206 million a year ago. Net sales were $1.06 billion, although representing a huge increase of 45 percent compared with $731 million for the same period last year, the growth is slow than the previous quarter . Facebook generated $1.13 billion in sales for the the fourth quarter of 2011, an increase of 55 percent over the same period of the previous year and net profit increased by 20 percent over the previous year same period.
Nevertheless, the Internet industry research regional Director of Nomura Securities Jinkyu Yoon said he is still full of optimism about the Facebook IPO. He pointed that the first quarter profit decrease of 12 percent was due to the seasonal factors, even if revenues declined, the company’s revenue base is still very large. Jinkyu Yoon said it is impressive that the social networking giant Facebook founded just about 5 years ago, has grown its revenues from $4 billion in 2011 to $6 billion this year. Facebook may become the Google’s most powerful competitor in content field in the future.
Turning to the approximately $100 billion valuation on Facebook, Jinkyu Yoon believed this valuation is not very large. Similar with Google and Amazon, Facebook’s business is quite of monopoly and it is very difficult for the other competitors to grab their market share in this field, this is why there is a such high valuation on the Facebook IPO. In another word, all of the premium is derived from Facebook’s business monopoly.
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