Facebook IPO: SEC Financial Details, Risks, Facts

Facebook at long last filed its Initial Public Offering today. That means its S-1 is available now for all to see — a document that brings great insight into the previously privately-held Silicon Valley company founded by Harvard dropout Mark Zuckerberg and partners.

As a public company, Facebook now is an open book, quite literally. The S-1 document Facebook filed to take its company on the public market spells out the company in incredible detail. It included some suspected and some little-known facts about Facebook’s business and personnel, publicly available for the first time.

An S-1, basically, is the standard form public companies must use to share data with the public markets and the Securities and Exchange Commission (SEC). When Facebook did its IPO this morning, this S-1 was the first doc everyone wanted to read.

As a private company previously, Facebook did not have to reveal the secret sauce. Now it’s out — I’ll include a downloadable PDF of it at the bottom of this post. Here are the highlights:

– Now we know how Facebook will price shares in its IPO to add up to a $5 billion raise. A $10 billion raise was rumored before. Last night, there were some comments on Twitter suggesting the raise would be at $5 billion and the rumors were true.

– Given the numbers, we now know this will be the largest IPO of an online company ever. Until the next one : )

– Because the stock price is as yet unclear — shares won’t start trading as (ticker name) FB shares until later this spring — the firm’s valuation is unclear. Analysts tell aNewDomain to expect a market cap of between $80 and $100 billion. That is an extraordinarily high number is you’re talking p/e ratios.

– In the S-1, Facebook had to reveal details about how it makes money and how it spends it. Facebook’s revenue model, as most industry watchers correctly assumed, is to generate revenue from intensely targeted display ads. It uses data aggregation to create them, based on the rich data Facebook members share about themselves, their Likes, their friends, schools, tagged pics and so on.

= The official membership number as reported to SEC for Facebook is 845 million souls.

– Again, the S-1 makes Facebook’s previously confidential financials an open book. In 2010, the S-1 says, the Menlo Park, Calif-based 8-year-old compay saw $1 billion in profits and $3.7 billion in overall revenue.

For comparison’s sake, take Google — the second most anticipated IPO in recent years. According to its SEC docs, it brought in more than $38 billion in revenue last year.

– Mark Zuckerberg, Facebook’s cofounder, turns out to own more than 56 percent of the firm’s shares. That makes him the majority owner, giving him great power to steer his firm, though he still serves on its board and must vote and comply with the votes.

– S-1 docs always list risks for investors. One of them is that the young Zuckerberg might die, endangering the company’s fortunes on Wall Street. At the “time of his death, control may be transferred to a person or entity that he designates as his successor.” Other risks include the success of other social networks, such as Google +.

– Zuckerberg makes $483,333 in salary, plus bonuses. His first half 2011 bonus was $220,500. His stocks and other compensation add up, too. This is one rich fellow — who, in six months, will be a lot richer. Typically, employees who hold stock cannot sell for six months.

Then they all buy loud, low red Ferraris. You think I am kidding. I worked in the Twitter building when some of those employees’ shares matured, though it is a private company.

Stay tuned for more. What a day. Here’s the S-1. Fascinating.

FacebookInc-20120201-S1-0

Now that Facebook has filed its Initial Public Offering (IPO) its financials, strategies, risks and revenue stream are an open book. Literally. It’s all in the S-1 Facebook had to file with the Securities and Exchange Commission (SEC)