Facebook has announced plans to sell shares to the public, just a day after the site’s new Timeline profile went live for millions of users worldwide.
In an announcement the social networking giant unveiled plans to float its shares on the stock market, in a move which is expected to raise around £3.16 billion and is one of the most valuable stock market flotations ever seen in the tech sector.
As well as being an exciting move for the company, the stock market flotation is proving a positive step for the many dozens of Facebook staff who own shares in the social networking site and are now set to become overnight millionaires.
Among those set to cash in from the stock plans include European vice president Joanna Shields, who could wake up as a multi millionaire, as well as graffiti artist David Chao, who took shares instead of cash as payment for decorating Facebook’s London Soho offices, reported the Evening Standard.
Reporting on the stock news, the BBC noted that the amount set to be raised by Facebook following the stock sale could be “the most for an internet initial public offering since Google and its early backers raised $1.67 billion in 2004”.
The profitability of Facebook suggested by the value has surprised a number of analysts, with principal of IPO investment advisory firm Renaissance Capital Kathleen Smith telling the BBC that Facebook is “a lot more profitable” than first thought.
However, she went on to note that Facebook now needs to focus on new areas of business “beyond display ads”.
Facebook’s valuation based on the amount it could make through the stock flotation put it above Linkedin and Yahoo!, and in other sectors, McDonald’s and Amazon.
Talking about the stock flotation, Facebook founder and chief executive Mark Zuckerberg said: “We’re going public for our employees and our investors. We made a commitment to them when we gave them equity that we’d work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment.”
In documents released as part of the stock flotation announcement it was revealed that Zuckerberg owns 28.4 per cent of Facebook.