Facebook Postpones IPO to 2012 for Missing Revenue Target
Facebook is postponing its initial public offering (IPO) planned in October or November and will go public late next year instead.
A U.S. research company attributed the postponement to the failure of the popular social networking site to meet its $2 billion target revenue for the first half of this year. The company's earnings by June was off the target by $400 million.
PrivCo, which studies privately-held companies, said Goldman Sachs had told investors that the company will earn $4 billion this year. The projection was made when it invested $450 million into Facebook in January.
"Facebook has seriously missed its own revenue forecasts," the Telegraph quoted PrivCo Chief Executive Sam Hamadeh as saying. "We do not believe, given such loss of momentum and the new unknown competitive threat from Google+, that a Facebook IPO will occur in spring of 2012 or even within the next 12 months."
Facebook Chief Operating Offier Sheryl Sandberg declined to comment on the IPO postponement. The Financial Times, however, reported a different reason for the IPO postponement. It quoted Facebook Chief Executive Officer Mark Zuckerberg as saying that he wanted the company to focus on product developments.
U.S. securities regulation put Facebook ripe for going public as the number of its shareholders had exceeded 500 in January. The rule, however, only requires such company to file a public financial results, the deadline of which is April 2012 for Facebook.
Facebook's face value currently stands at $60 billion.