Facebook has scaled back its $10 billion IPO to $5 billion with the promise of scaling the initial offering to meet investor demands. According to reports the social network will officially file an IPO request with the Securities Exchange Commission (SEC) on Wednesday.
According to International Financing Review the scaled down offering reflects a decision by Facebook’s financial directors to be “more conservative” with their numbers to meet expectations while some analysts have called the $5 billion marker nothing more than a placeholder.
The company is expected to release its IPO in May and with a $100 billion valuation expected Founder Mark Zuckerberg who owns 20 percent of the company could be worth $20 billion on paper, making him the 14th richest American.
Analysts in the meantime continue to battle over the actual valuation of Facebook which earned $3.8 billion in 2011 with $1.5 billion in operating profits.
Expected to be named as the social networks underwriter is Morgan Stanley which would give the company a big win over competitor Goldman Sachs who has been fighting hard to earn the tens of millions of dollars in transaction fees the IPO is likely to bring.