Facebook's IPO will no doubt generate screens full of digital media in the coming weeks, and Grok will certainly get in on the act. But not just yet. First, we want to read the S1 filing and the reams of copy already devoted to the topic. So, for the time being we will focus on what everyone else thinks.
Actually, you don't really need to go any further than the <i>Business Insider </i>, which has the most comprehensive coverage we could find under the predictably titled “Here's everything you need to know about Facebook's coming IPO”.
It includes graphical representations of the business, notes that Facebook's ad revenues are decelerating, and includes the gob-smacking observation that Mark Zuckerberg will owe the tax department $1.5 billion dollars. Save your tears for the time being, Business Insider also identified who walks away with the loot or rather how much they are theoretically worth since very little of the stock will actually be offered. You will be relieved to know young Zuckerberg will meet his tax obligations with plenty of loose change left over.
BI also has a piece by Steve Kovack , speculating on a Facebook smartphone. Kovack wrote: “By now it's no secret that Facebook is actively working on its own smartphone. But thanks to the company's recent IPO we have a better idea why.” He is referring to the control that companies, like Google and Apple, have over Facebook's destiny with their respective offerings, and the massive take up (with currently no revenues) of Facebook mobility.
Indeed, the most interesting thing about the IPO that Grok has so far observed is the very heavy qualification Facebook includes on the subject. That's because it basically has no mobile revenues, despite the fact that smartphones are its fastest growing channel.
Our thanks to the blog, <i>Takingpitches</i> for identifying the specific reference in the S1. “Although the substantial majority of our mobile users also access and engage with Facebook on personal computers where we display advertising, our users could decide to increasingly access our products primarily through mobile devices. We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. Accordingly, if users continue to increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, our revenue and financial results may be negatively affected.”
Techcrunch looks at how the Facebook numbers compare to the Google numbers pre- IPO. Of more greedy interest is this piece by the San Francisco Chronicle outlining who gets to add the big "B" achievement badge to their avatar on day 2.0 of the float .
Finally, the initial filing values the company at $94 billion and not the loose, lazy $100 billion everyone has been talking about. So that's a 6 per cent discount to all those ill informed expectations. But Facebook is only looking to raise a paltry $5 billion which suggests this is stock hoarding so tight it that makes Groupon look profligate. When it listed, Groupon was accused by some of ‘gaming the system’ by selling such a tiny amount of its stock. Interestingly, Facebook so far has avoided similar suggestions.
But for now, Grok will leave you with this prediction: Facebook's opening price and first day close will blow away the $100 billion valuation threshold. And for the record, that is not a BUY recommendation.
Andrew Birmingham is the CEO of Silicon Gully Investments.