Yawn: more Facebook IPO rumours

The social network has suspended trading of its stock, which has got investors all in a tizz. It might even be for real this time...

by Emma Haslett
Last Updated: 16 Mar 2012
Ah, Facebook IPO rumours: they’re as familiar and persistent as that wide-eyed pouty face people pull in the 80% of the pictures posted on the social networking site. And they’re back, after the FT alerted us to the fact that the company has suspended trades of its stock on the private secondary market – which is exactly the sort of thing companies often tend to do just before they make a big announcement. Like, say, an IPO. Then again, it could all be another big let-down…

The freeze means that while, over the next two days, people can still buy and sell Facebook’s stock, its lawyers won’t approve any of the trades until Monday. In the past, Facebook’s done exactly this to have a bit of breathing room while it reviews a list of its shareholders. But, now that markets are beginning to settle after months of turmoil thanks to the eurozone crisis, it could also mean something a lot bigger.  

To be fair, the rumours are perfectly warranted – after all, Facebook has been threatening IPO for the past two years, and having watched rival tech giants like games designer Zynga and group-buying website Groupon perform reasonably successful IPOs, this might be its moment. What’s clear is that if/when it finally does get its act together, with a valuation of between $80bn and $100bn, it’ll be one of the largest flotations ever. So you can understand investors’ excitement.

That valuation might seem enormous for a website where an unusually high proportion of its traffic seems to focus on photographs of kittens, but it isn’t necessarily an exaggeration. Figures released yesterday by Deloitte have suggested, for example, that in the EU alone, the website puts £12.7bn into the economy, supporting 232,000 jobs (35,200 of which are in the UK). Admittedly, the research was commissioned by Facebook, but it does give some indication of just how integrated the social network is into our lives. Which, if you think about it, is a bit scary…

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