Facebook’s $5 billion IPO
Yesterday, Facebook filed all of the necessary paperwork to become a publicly traded company which means the company had to be very public about their inner workings ranging from their revenue (which is almost exclusively advertising dollars) to current and future salaries, as well as their growth patterns and major threats such as innovations from Microsoft, Google and Twitter.
Some wonder, however, why did Facebook choose yesterday as their filing date? Is it because it is around the eight birthday of the social network? Some claim that to be the reason, but Google+ enthusiast, Paul Allen saw a pattern in the filing with the SEC, revealing the first quarter to be Facebook’s best growing quarter every year, going back for the past three years, making it more attractive to potential stock investors.
If Facebook can claim “in this quarter alone, we have seen astronomical growth of monthly active users,” their stock becomes more valuable and more lucrative, whereas if they waited until summer or fall, they would traditionally see a reduction in monthly active users.
According to Paul Allen via Google+:
“Chart of the Day: Facebook “Monthly Active User” growth by quarter for past 3 years:
Q2 2009 – 45m users
Q3 2009 – 63m users
Q4 2009 – 55m users
Q1 2010 – 71m users
Q2 2010 – 51m users
Q3 2010 – 68m users
Q4 2010 – 58m users
Q1 2011 – 72m users
Q2 2011 – 59m users
Q3 2011 – 61m users
Q4 2011 – 45m usersQ1 seems to be the best quarter for Facebook growth. (Q3 is 2nd best.) Given the recent slowing in their growth rate in Q4 and given Google+’s accelerating growth, it will be fascinating to see what kind of Q1 Facebook has this year. I assume they will release Q1 information in April or May before the IPO.
It will also be interesting to see if Facebook sees growth in the US and Canada in Q1 2012, where they added just 3m users in Q4, their slowest growth so far in North America. (Q4 also saw fewer new users in Europe than ever before.).
So while it is Facebook’s eight birthday season, it is also traditionally a season of growth, making it an ideal time for the company to file their IPO.
