As we mentioned last week, Facebook’s IPO (initial public offering) was expected mid May. However, reports are surfacing that it may now be at least June before Facebook has their IPO. Here’s why.
According to CNBC, CEO Mark Zuckerberg has simply been to darned busy running the business to prepare for the required meetings with investors and Wall Street. Says the CNBC report, “a string of acquisitions and other business distractions are threatening to delay the sale”.”
In particular, Zuckerberg is said to have single-handedly pulled off the surprise acquisition of Instagram (for $1 billion) over a single weekend, and has recently been up-to-the-elbows involved in an acquisition of intellectual property (IP) from Microsoft for more than half-a-billion dollars.
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In addition to this taking Zuckerberg’s time so that he can’t fully focus on pre-IPO preparations, it also means that Facebook will have to amend their filings with the SEC to include these recent acquisitions.
Putting the IPO off for even a week or more would push the date towards the end of May, which of course is Memorial Day – not a good time for an IPO. So the smart strategy at that point would be to push it into June.
That said, these acquisitions are likely to enhance Wall Street’s valuation of Facebook, and to lead to the IPO commanding an even higher price, which may well be part of Zuckerberg’s strategy.
Think of Instagram and the Microsoft IP as part of Facebook’s IPO dowery.
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