Facebook files for market flotation

Facebook, the world’s largest internet social networking site has taken its first formal steps towards being launched on the stock market.

The brainchild of Harvard University dropout Marc Zuckerberg, has filed papers seeking to raise the equivalent of 3.8 billion euros in its initial public offering, or IPO.

But that is likely to change with the company hoping to double that figure, putting it on track for one of the biggest Web stock market debuts of all time.

Facebook’s worth comes from the fact that over 800 million people use the site each month, and half of those come back every day.

It is forecast to have generated revenue of 3.3 billion euros last year with the lion’s share – three billion – of that from advertising, making a profit of 650 million euros.

The initial public offering could reflect a company value topping the 75 billion euro mark, but does that make it a sure bet as an investment?

Financial expert Brian Hamilton from Sageworks explained: “This whole IPO is about evaluation. If you are coming in right now and the company is priced too high, it leaves potential for downside on price in six months to a year.”

It is still not confirmed where the company will be floated, but May is the target date for when the shares will begin being traded. That is when others from the same social media world will be watching with interest.

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