Facebook to IPO in May; Ignore 2011's rubbish IPO year

Facebook to IPO in May; Ignore 2011's rubbish IPO year

Summary: Facebook could be heading for a mid-May initial public offering. But while the eyes are on Facebook, actually there's little it can do besides pick the right date to go public.

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Facebook is likely to go public in the third week of May, according to AllThingsD.

This means that the social network needs to provide documentation to the U.S. Securities and Exchange Commission to process the vast array of supporting documents, for a mid-May launch.

With an estimated $10 billion raising on a $100 billion valuation, it will make Facebook one of the richest companies in Silicon Valley.

But whatever Facebook does now will scarcely have an effect on whether the company will boom or struggle in the hours, days and weeks after it goes public. It's likely it will probably boom at first and then plateau out.

But there's no reason to think this coming year is going to be any better than the last.

In 2011, to show the worst-case scenarios, Groupon fell terribly within days of its IPO, from $30 a share to below IPO-price at just $10 a share. LinkedIn surged shortly after its flotation, only to crumble within the following days. Pandora and Zillion suffered huge losses for November, but clawed most of it back during the following month. Zynga struggled after its first day when shares slumped below the IPO mark by market close on day one.

Facebook has to be seen as a strong contender in going public. If Facebook of all companies suffers an overall loss in the long run, it just goes to show that the market has plummeted and nobody cares anymore. Bankers, throw yourselves from your windows, and investors, you can keep your money firmly in your pockets.

The market has changed since Google went public. The dot-com boom was over, the web was getting on its feet again, and the technology world needed a saviour. But nearly a decade on, going public is merely a formality as part of efforts to give something back to its investors.

But even though 2011 was a tough year for companies hitting the public trading floor, the Eurozone crisis combined with further recession worries at the end of last year shook the markets to its core.

The focus should instead be on the company itself. Can the company that will have an estimated 1 billion users by this time next year succeed, and continue to thrive? Will Facebook be able to continue raking in the money and keep its users 'happy' (I use the word lightly)?

Through privacy issues after security problem, to site changes and data protection worries. No matter what you throw at Facebook, it bounces back and survives through, brushing off the scrapes and scratches, but never suffering a limb detachment.

In other words, Facebook can do nothing at this point. It can file the paperwork, it can prepare itself as best as it can, and pick what appears to be calm waters in the choppy sea of turbulent markets. It can't learn from the mistakes of Groupon, LinkedIn, Pandora, or even Zynga.

Facebook is reliant on itself, not others. Others are reliant on Facebook to make money. Facebook is not going to crumble any time soon, Zynga would completely crash. But what it can take in is solace that what it does will affect others. If Facebook's shares slump, could this hit Zynga, who heavily invests in Facebook's platform?

But in what Facebook does, the world will be watching. Should the Eurozone crisis stabilise and Facebook's IPO go ahead without a hitch, it could make the second-half a lot more appealing to prospective companies going public.

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Topics: Social Enterprise, Banking, Data Centers, Legal

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