Facebook IPO Reportedly Put Off Until 2012
Jul 30th 2010 7:25AM
Updated Jul 30th 2010 2:44PM
Facebook will probably postpone its initial public offering until 2012, Bloomberg reports, citing three people familiar with the matter. The reason, according to sources, is to give founder and CEO Mark Zuckerberg more time to gain users and boost sales without the public scrutiny that comes with a public listing.
Public companies must report quarterly results and disclose much more information to shareholders than privately held companies. Twenty-six-year-old Zukerberg can afford the time to hone his skills. Facebook also intends to at least double sales to $1.4 billion in 2010.
Investors had speculated that Facebook would hold the IPO in 2011. While Facebook doesn't discuss share-sale plans, Zuckerberg, who controls the board, could push for a stock sale at any time. Facebook declined to comment, Bloomberg reports.
Zuckerberg faces a range of challenges, including management of a rapidly growing workforce, rising competition from companies such as Twitter, and heightened regulatory scrutiny over how the company handles personal data. He also has to resolve a lawsuit from a New York man, Paul Ceglia, who claims he owns 84% of Facebook.
Postponing the IPO may disappoint investors in general as some were hoping a Facebook offering would fire-up the technology IPO market, which has dried up in the recent years.