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Facebook To Put Off IPO Until Late 2012
jfruhlinger writes "Facebook's whispered about IPO is one of the most anticipated in the industry — but it looks like we'll have to anticipate it for a bit longer. The Financial Times, quoting anonymous sources, says that it won't happen until late next year. Those sources say the purpose is to keep Facebook employees focused on product development, but it seems more likely that Facebook's bankers aren't happy with the company's numbers (or the economy's prospects)."
The Mayans predicted it, Facebook will bring about the end of the world in 2012!
I reject your reality and substitute my own.
For all the privacy they've squashed and all the censorship they've jack booted.
Some of the issues are collected here http://stallman.org/facebook.html
Facebook missed the boat. The bubble is burst.
This doesn't come as a surprise to me at all. Who in their right minds would go forward with an IPO when the investors are trying to pull out their money from the market. Seems to me, Facebook has a lot of time before it can go ahead with this, if they want it to be a success!
I've got an old theory that everyone's hot at some point in their lives...which is why it's difficult to see a cute little kid knowing full well they've got a devastating blow coming to them as their nose grows too long, their face takes on odd proportions or their complexion goes to pot, oftentimes before they've even hit dating years.
Now, there's Facebook. Did they get hot once already and the decline is starting to set in? When you think about the "social infrastructure," are they the first to come to mind? Does Google actually have the opportunity to change the game on them in a way that they'll never be able to compete with? And does the radical demise of every hot property from CompuServe to Yahoo! tell us everything we need to know about how deep our roots are in the social world?
Not saying it's true, just saying it's worth pondering...
---- Please be nice in case my Slashdot karma ~= my real life karma.
I've been in a tech company that was poised for an IPO just before the sub-prime bubble burst and rained on everyone's parade. An external firm was brought in to handle it, took one look at the books, and told us that we were, to paraphrase only very slightly, having a laugh.
A business model based on growing on private investment rather than revenue, vastly over-inflated self estimate of worth, and years of accounting sleights of hand were easily rooted out.
Sight unseen, I'd suspect - OK, to be honest, hope - that Facebook is in a similar situation. They may have to go through a few firms before they find out willing to take them to market with a multi billion dollar cap and a straight face.
If you were blocking sigs, you wouldn't have to read this.
I hate the Facebook, try as I might I've had zero success in migrating my family and friends to superior services like twitter & google+. (I'm gen x btw). Reason being is my non computer literate family and friends can't cope with the cognitive dissonance of learning yet another www site on the internet. If they do manage to do so, then there's no-one there, except boring self-promoters (hello twitter!). So Facebook will be around for a long time to come and people like me who know there's better alternatives will still be forced to use it.
Getting back on topic, postponing the IPO makes a tonne of sense. The markets are in turmoil with Greece and Italy about to default. For an IPO of the size of Facebook, any sensible banker would wait and see.
Plus the USA has its election next year, so inevitably the pork barrel will come out. No doubt that will add a couple of digits to the user/revenue/ebitda mulitple that Facebook will be valued at.
I'll see your hokum and raise you a boondoggle.
first demonstrate you can deal with google+ then we give you money.
What does IPO stand for?
This is going to be a tough one. Google has already changed the game and Facebook is squirming. I see mainstream news stories about Facebook adding new features that copy Google+. Bankers have advisers who see this kind of thing happening. Frankly, any brokerages/banks willing to float the IPO are looking for an IMMEDIATE payoff (i.e. stripping new "investors" of their buy-in of common stock). Read the "Wall Street Jungle", its an old book the explains this stuff in a simple manner. It is not magic. Plus, the MySpace fiasco is still fresh in everyone's mind. It was SOOO hot!
I object to power without constructive purpose. --Spock
Nowhere in the Financial Times article or the pointless IT World blog post is there anything to support this claim. The FT says the opposite: it's desirable to delay the IPO as much as possible, especially during times of market volatility, and furthermore revenues have most likely doubled since last year.
"A week in the lab saves an hour in the library"
I see mainstream news stories about Facebook adding new features that copy Google+.
Such as the "feature" of not being able to create an account at all because all servers are full?
"...the purpose is to keep Facebook employees focused on product development..." This amused me more than any lolcat I am likely to see today.
If Slashdot were chemistry it would look like this:Cadaverine
The straightforward answer is that a company feels they need a quick cash infusion to take them to the next level. But that must mean they already have a plan for spending that money. Facing competition from Google, knowing that they may have already jumped the shark, knowing that money will become tight real soon, the only reason to put it off till next year is because the owners are planning to cash out, and cash out big.
Starbucks, Harbuckle of Breath.
So Facebook will be around for a long time to come and people like me who know there's better alternatives will still be forced to use it.
Huh? Unless you are in the unlikely circumstance where your employer requires you to use Facebook as part of your job, no one is forced to use Facebook. I don't have an account and live quite happily without Facebook. In fact I cannot see any real fit for it in my life - it just has nothing to offer me that I need or want. I'm not denying that Facebook can be useful/fun for many people but it is highly overrated in terms of it being necessary.
Why would anyone buy stock in something that is about to get decimated by Google+?
The problem is that you stop being social with those who need it the most - those you won't find on Facebook.
Someone who has that much difficulty being social won't be found outside of Facebook either. If someone is interested in being social they will find a way to do it - with or without Facebook. Believe it or not it's 100% possible to have a social life without using Facebook, Twitter, text messaging, email, instant messaging or even... gasp, the internet.
Goldman Sachs bought all those private shares some time ago, looking to make a bunch of money off the IPO. Now that they've had a look at the books, maybe they fear that Facebook isn't worth nearly as much as they hoped.
I went to eat some animal crackers and the box said, "Do not eat if seal is broken." I opened the box and sure enough..
Your user base is shrinking, competitors are popping up, and the limited attention span of the somnambulant masses has just about expired.
Try curling up into a ball, or leaving with tears on your face over being excluded by people who don't even realize it, and you are closer.
Everyone feels this way sometimes. Seriously, everyone. We're social animals and we generally care about being accepted by others even when it should not matter. Any guy who has ever tried to ask a girl out of a date knows that it can be terrifying, even if you are normally loaded with self confidence. And if you get turned down it can really really hard. People fear public speaking basically out of fear of rejection. Being rejected or turn down for a job, a friendship, or even just a friendly conversation is depressing and hurts in a very real way. I myself am naturally a relatively shy person who has to work hard to maintain social connections. It's not easy.
The good news is that there are over 6 BILLION people in this world. I guarantee you that there are people out there who will be interested in you for who you are. You don't have to like everyone and you don't have to be liked by everyone. Most people in this world are just like you, trying to find a few people who they fit in with and can be accepted by.
If that isn't enough there are professional counselors out there who can help. There are anxiety and other disorders that are medical and can be treated. Social behavior can be coached if you find it difficult. None of this is anything to feel ashamed about.
Try talking to fifty people and only get one response because someone felt obliged. Sure, that is awkward, but that's not the problem. Seeing those other 49 joke and laugh as a reminder of what you won't experience is what hurts.
If that happens then it is time to seek acceptance with a different group. Speaking from personal experience I only really have maybe 3-4 people outside of my family I would regard as friends and actually worry about what they think. Don't worry about what 50 people say. (easier said than done, I know) Find a few people you really care about and who care about you and worry about what they say. Spend your time with them. If you find a social situation awkward, ask those few close people for help and listen to what they say.
If you worry about the 50 saying rude things then you are giving them power over you. I know from personal experience it isn't easy but ultimately you have to decide that their opinion doesn't matter to you and move on. If you did something which was embarrassing or socially awkward, acknowledge it, own it and move on. We all do it and we all get laughed at when we do it. No one likes to be embarrassed or worse, excluded. Sometimes the problem comes when we take ourselves too seriously. I heard Conan O'Brien once say that "comedy is throwing out your dignity and hoping that you get it back". Don't hold on so tightly to your dignity and you might find that some of those people are laughing with you instead of at you.
Good luck
It has also brought businesses, restaurants and everything to one single page with one unified interface, so you don't have to hunt them from Google or other search engines.
Facebook thinks it is the Internet, and many of it's users agree. Now, you just have to hunt them down through Facebook search. I'm not sure that's any improvement. Rather, I see that is a major step backwards. What good is a unified interface to developers and innovation? Do we just hand over the keys to Facebook? Want your restaurant to have a reservation system? Better ask Facebook to make one for you.
I8-D
It has more to do what the markets are looking like than rather they had an over valuation. In the past few weeks goldman has been wrong on their gold options and their EUR/USD spreads. They wouldn't want to risk another multi billion dollar screw up.
....I'll give a penny to anyone who answers correctly.
This is snark, but actually I do have a LARGE entity in mind that I would bet big bucks will be the first to purchase.
In fact, I'd bet they're talking to them already and working on the best way to ensure success and looking "clean" on it.
The purpose of an IPO is at least partly raise a lot of money for the company. So what can FaceBook do with an influx of cash that will generate big profits? I'm sure they could spend a lot on upgrading servers, rewrite parts of the code and add new features, but what is really going to bring in the income? They need to bring in a ton of new users, or find an excuse to greatly increase ad costs, or do something else entirely to bring in money.
Facebook is valued based on the fact that it has tons of personal information that it can make available to advertisers. Goldman Sachs and others have already bought into it based on this. However, in practice once they do that there will be a huge outcry, people will leave, those that stay will get the government involved, and it will be a huge mess. They can't just tell Goldman Sachs, sorry, we're only worth half of what you paid into, they need to figure out an alternative business model which will get them valued equal to the "sell peoples personal data" business model.
The summary absolutely mischaracterizes the blogs it references. The blog relating to Bacebook's bankers doesn't saw anything more than that they can't rule out unsound financials. However, the author himself goes on to say that he doubts this, instead suspecting that the planned delay most likely relates to market conditions. He's likely correct. While the likes of Goldman Sachs may have over paid, Facebook appears to be a solvent venture. Groupon would love to say as much... But don't worry, if they just get big enough they'll start raking in the cash. Never mind the fact that as revenues grow at Groupon, so do loses.
Some could jump ship to more lucrative startups.
So Facebook, Zynga, and Groupon are both possibly pushing back their IPOs. Bubble bursting anyone?
By the end of 2012, FB will be "old news". Not quite MySpace 2.0, but the trend will begin to point there. They should IPO now. Trouble is, the moment they IPO (well, 6 months after, due to the quiet period), a lot of employees who have a significant amount of options will exercise them and move on. I have a couple of friends who work there, and while they like working there overall, that's exactly what they intend to do. :-)
I remember reading a couple of stories about the first shares of stock that were floated by Goldman Sachs. The SEC prevented Goldman from selling the shares in the United States, so GS had to go to Asia to get rid of them. It was speculated that the shares were so over valued that the SEC was protecting American investors. Is that still the case? Can the shares even be offered in the US?
Facebook's user count has stopped growing in the US and UK. That's a killer sign for an IPO.
Once growth has stopped, the company's value has to be based strictly on revenue. The value of the stock is the present value of future dividends. It's not clear how profitable Facebook really is. Since they're private, audited numbers are not available.
Once the number of users has peaked, all the ways to increase revenue annoy users. Facebook can run more ads. (See Myspace for where that leads.) They can add more services (Yahoo and Google went overboard in that direction. It didn't help.) They can force developers to pay them. (That works in the short term, until the major developers figure out another way to get paid.)
Social networks have a life cycle, like nightclubs. They start small, get the cool people, then allow massive numbers of people in. The jerk level becomes excessive, the cool people leave, and the social network winds down. This happened to AOL, Geocities, Orkut, Tribe, Xanga, Bebo, Yahoo 360, Nerve, and Myspace. Facebook looks to be next.
http://goo.gl/V9S3B
Why SEC is not regulating the market capitalization of listed companies while FED regulates the reserve ratio of banks?