Last week, Facebook co-founder and CEO Mark Zuckerberg as well as the company's COO Sheryl Sandberg sat down with PBS broadcast journalist Charlie Rose. The interview aired earlier this week and contains many juicy details on a variety of topics.
One of the subject matters discussed was the company's initial public offering (IPO). Facebook is expected to go public next year, possibly as soon as Q1 2012 (conflicting rumors argue there will be a delay). Zuckerberg insists, however, there is still no expected timeframe for his company's IPO:
Charlie Rose: So then why do you want to be a public company? Why do you even think about an IPO?
Mark Zuckerberg: I actually think the biggest thing for us is that a big part of being a technology company is getting the best engineers and designers and talented people around the world. And one of the ways that you can do that is you compensate people with equity or options, right, so you get people who want to join the company, both for the mission, right, because they believe that Facebook is doing this awesome thing and they want to be a part of connecting everyone in the world, but also, if the company does well, then they get financially rewarded and can be set. And, you know, we've made this implicit promise to our investors and to our employees that by compensating them with equity and by giving them equity, that at some point we're going to make that equity worth something publicly and liquidly, in a liquid way. Now, the promise isn't that we're going to do it on any kind of short-term time horizon. The promise is that we're going to build this company so that it's great over the long term, right. And that we're always making decisions for the long term, but at some point we'll do that.
Charlie Rose: And it will be liquid dividend for your --
Mark Zuckerberg: Yeah, whether it's a dividend or not, they'll be able to trade their equity for money. And you know, that's something that we take seriously, as a responsibility of running the company. And we just care deeply about all employees and the investors who have been there with us.
Charlie Rose: Has the Groupon experience and has things changed your sense of the timing of an IPO?
Mark Zuckerberg: I don't -- I don't think so.
Sheryl Sandberg: Not really.
Mark Zuckerberg: No.
Charlie Rose: you'll go when what? When will you decide?
Sheryl Sandberg: When we're ready.
Mark Zuckerberg: Yeah.
Charlie Rose: No, but how -- what will tell you it makes sense?
Mark Zuckerberg: I don't know. It's a good question. Yeah.
Charlie Rose: But you'll just know?
Mark Zuckerberg: I mean, yeah. It's -- honestly, it's not something I spend a lot of time on a day-to-day basis thinking about it now.
In December 2010, Facebook announced that it had raised $1.5 billion at a valuation of approximately $50 billion, but that it had no immediate plans for the funds and would simply continue to build and expand its operations. The transaction consisted of two parts: in January 2011, Goldman Sachs completed an oversubscribed offering to its non-US clients in a fund that invested $1 billion in Facebook Class A common stock, while in December 2010, Digital Sky Technologies, The Goldman Sachs Group, and funds managed by Goldman Sachs, invested $500 million in Facebook Class A common stock at the same valuation.
Facebook's valuation has been all over the place in the months following the investment at $50 billion. Some look at the growth and see great prospects. Others see a dip in the last few months and think Facebook is doomed. The truth is we can only make predictions on the little data we have.