• Sec Preliminary Prospectus
• Facebook Prospectus Pdf
• What Is In A Prospectus

Facebook founder resisted buyout offers, suggesting the company was 'definitely in no rush.' For years, Facebook and Zuckerberg resisted both buyouts and taking the company public. The main reason that the company decided to go public is because it crossed the threshold of 500 shareholders, according to Reuters financial blogger Felix Salmon. Facebook reportedly turned down a $75 million offer from in 2006.

That same year, attempted to buy the company for $1 billion but Zuckerberg refused. Also that year, reported a $2 billion valuation for the company. Facebook did accept investments from companies, and these investments suggested fluctuating valuations for the firm. In 2007 beat out to purchase a 1.6% stake for $240 million, giving Facebook a notional value of $15 billion at the time. Microsoft purchased preferred stock, which meant that the company's actual valuation would be considerably lower than $15 billion. Meanwhile, that valuation dropped to $10 billion in 2009, when bought a nearly 2% stake for $200 million - a larger stake than Microsoft had purchased at a lower price.

An investment reporte in 2011 valued the company at $50 billion. Zuckerberg wanted to wait to conduct an initial public offering, saying in 2010 that 'we are definitely in no rush.' But since by 2012 Facebook had more than 500 round lot (over 100 shares) stockholders, Facebook was subject to the SEC disclosure rules starting the next year, 2013. Zuckerberg had little choice as to whether an IPO had to be done at once. Preparation Filing and roadshow Facebook filed for an initial public offering on February 1, 2012 by filing their S1 document with the (SEC).

The preliminary prospectus announced that the company had 845 million active monthly users and that its website featured 2.7 billion daily likes and comments. The filing noted that the company's increases in membership, as well as its incomes, were slowing and that the deceleration was likely to continue. To ensure that early investors would retain control of the company, Facebook in 2009 instituted a dual-class stock structure. After the IPO, Zuckerberg was to retain a 22% ownership share in Facebook and was to own 57% of the voting shares.

The document also stated that the company was seeking to raise 5 billion, which would make it one of the largest IPOs in tech history and the biggest in Internet history. The roadshow faced a 'rough start' initially. Zuckerberg raised controversy for wearing a (rather than a customary business suit) to the first meeting with investors. Analyst called it a 'mark of immaturity.' A half-hour-long video played during that meeting also frustrated investors who wanted to discuss more technical details, and was dropped for future meetings. Valuation.

Facebook's valuation steadily increased in the days leading up to the IPO. Prior to the official valuation, the target price of the stock steadily increased. In early May, the company was aiming for a valuation somewhere from $28 to $35 per share ($77 billion to $96 billion). On May 14, it raised the targets from $34 to $38 per share. Some investors even suggested a $40 valuation, although a dip in the stock market on the day before the IPO ended such speculation. Strong demand, especially from retail investors, suggested Facebook could choose a relatively high offering price. Ultimately settled on a price of $38 per share, at the top of its target range.

This price valued the company at $104 billion, the largest valuation to date for a newly public company. On May 16, two days before the IPO, Facebook announced that it would sell 25% more shares than originally planned due to high demand. This meant the stock would debut with 421 million shares. The Facebook IPO brought inevitable comparisons with other technology company offerings. Some investors expressed keen interest in Facebook because they felt they had missed out on the massive gains saw in the wake of its IPO.

Stock, meanwhile, had doubled on its first day. At $26.81 per share, which Facebook closed at a week after its IPO, Facebook was valued like 'an ultra-growth company,' according to Robert Leclerc of the Financial Post. Its was 85, despite a decline in both earnings and revenue in the first quarter of 2012.

A number of commentators argued retrospectively that Facebook had been heavily overvalued because of an illiquid private market on, where trades of stock were minimal and thus pricing unstable. Facebook's aggregate valuation went up from January 2011 to April 2012, before plummeting after the IPO in May - but this was in a largely illiquid market, with less than 120 trades each quarter during 2010 and 2011. 'Valuations in the private market are going to make it 'difficult to go public', according to, an American venture capitalist and former Wall Street securities analyst. Price targets Prior to the IPO, several investors set price targets for the company. On May 14, before the offering price was announced, Sterne Agee analyst Arvind Bhatia pegged the company at $46 in an interview with. The interviewer cautioned Bhatia against what she perceived as Bhatia's low valuation, suggesting the stock could rise to '60, 70, 80 dollars' and could shoot up to $60 on the first day of trading.

On May 17, the day before the offering, analyst Jim Krapfel of Morningstar suggested that only a 50% or better increase on the first day would be seen positively; 'anything under that would be underwhelming.' Lee Simmons of predicted more modest first-day gains, in the range of 10 to 20%.

No analysts Reuters interviewed projected a first-day decrease. Others were less optimistic. Much of Wall Street expressed concerns over what it saw as a high valuation. Citing the of 108 for 2011, critics stated that the company would have to undergo 'almost ridiculous financial growth for the valuation to make sense.'

Other companies trade at far lower ratios, although there are notable exceptions. Writers at expressed similar skepticism, stating, 'That's a big multiple to live up to, and Facebook will likely need to add bold new revenue streams to justify the mammoth valuation'.

Early investors themselves were said to express similar skepticism. Warning signs before the IPO indicated that several such investors were interested in selling their shares of the company. Planned to offload as many as 28% of their shares, while was ready to sell up to 50% of theirs.

Rolfe Winkler of the suggested that, given insider worries, the public should avoid snapping up the stock. Facebook employees were less concerned, with Mark Zuckerberg planning to sell just 6%. Analysis of fundamentals Striking an optimistic tone, predicted that the offering would overcome questions about Facebook's difficulties in attracting advertisers to transform the company into a 'must-own stock'. Of described it as 'the next great blue-chip'. Some analysts expressed concern over Facebook's revenue model; namely, its advertising practices.

Brian Wieser of Pivotal Research Group argued that, 'Although Facebook is very promising, it's an unproven ad model.' To better monetize user involvement, the company could improve advertising.

Yet such efforts could undermine user privacy. Also, some advertisers expressed concern over the value of the advertisements they purchased on Facebook. Announced it would pull its $10 million campaign from the social network just days before the IPO. The automobile company asked for 'bigger, flashier' advertisements but Facebook refused. Public trading In the immediate build-up to the offering, public interest swelled. Some said it is 'as much a cultural phenomenon as it is a business story.'

Meanwhile, Facebook itself celebrated the occasion with an all-night ' on the night before the IPO. Zuckerberg rang a bell from Hacker Square on Facebook campus in, to announce the offering, as is customary for CEOs on the day their companies go public. First day.

An electronic billboard on the building welcomes Facebook to the Nasdaq. Trading was to begin at 11:00am Eastern Time on Friday, May 18, 2012. However, trading was delayed until 11:30am Eastern Time due to technical problems with the exchange. Those early jitters would foretell ongoing problems; the first day of trading was marred by numerous technical glitches that prevented orders from going through, or even confused investors as to whether or not their orders were successful. Initial trading saw the stock shoot up to as much as $45.

Yet the early rally was unsustainable. The stock struggled to stay above the IPO price for most of the day, forcing underwriters to buy back shares to support the price. Only the aforementioned technical glitches and underwriter support prevented the stock price from falling below the IPO price on the first day of trading.

At closing bell, shares were valued at $38.23, only $0.23 above the IPO price and down $3.82 from the opening bell value. The opening was widely described by the financial press as a disappointment. Despite technical problems and a relatively low closing value, the stock set a new record for trading volume of an IPO (460 million shares). The IPO also ended up raising $16 billion, making it the third largest in U.S. History (just ahead of and behind only and ).

The stock price left the company with a higher than all but a few U.S. Corporations – surpassing heavyweights such as, and – and made Zuckerberg's stock worth $19 billion. Subsequent days Facebook's share value fell during nine of the next thirteen trading days, posting gains during just four. The next day of trading after the IPO (May 21), the stock closed below its offering price, at $34.03. The stock saw another large loss the next day, closing at $31.00. A was used in an attempt to slow down the decline in the stock price. The stock increased modestly in coming days, and Facebook closed its first full week of trading at $31.91.

The stock returned to losses for most of its second full week, and had lost over a quarter of its starting value by the end of May. This led the to call the IPO a 'fiasco.' The stock closed its second full week of trading on June 1 at $27.72. By June 6 investors had lost $40 billion.

Facebook ended its third full week at $27.10, slightly lower than a week previous. The company finished its fourth full week with an increase to $30.01, its first weekly gain. Bultman, Matt. The Greenburgh Daily Voice. Retrieved 18 July 2012.

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Sec Preliminary Prospectus

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Facebook Prospectus Pdf

Retrieved 24 May 2012. Stephen Gandel, CNN Money, May 24, 2012.

What Is In A Prospectus

Stephen Gandel, CNN Money, May 23, 2012.