Facebook announced today about its intention to float $10 Billion IPO. Only 10 times there has been an IPO of more than $10 billion. The biggest IPO by an Internet based company was from Google, that was less than $2 billion. So how is Facebook so different from others? Its revenue almost doubled from last year and in current fiscal year its projected revenue is $4 Billion. There are two moot question about Facebook IPO 1) Is $100 billion valuation correct? 2) What Facebook plans to do with $10 Billion? IPO generally is backed by a need of financing some project or need of expansion. It is unclear why Facebook needs so much of money. About valuation, its difficult to imagine a $100 billion internet company, whose core competency is to help people connect. Yes it has more than 500 million users who log-in daily. But does that makes it so much valuable. Its earnings has been very small until recent years. Even if we use very optimistic approach and say Facebook ad...
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