Facebook (Facebook IPO, May 2012)

Adrian Wyld/Canadian Press, Via Associated Press

Updated: May 14, 2012

Facebook is the world’s largest social network, with 901 million monthly users worldwide, and roughly 200 million in the United States, or two-thirds of the population.

Created in 2004 by Mark Zuckerberg in his dorm room at Harvard, Facebook grew from being a quirky site for college students into a popular platform that is used to sell cars and movies, win over voters in presidential elections and organize protest movements. It offers advertisers a global platform, with the exception of China, where Facebook does not operate.

Facebook took its first step toward becoming a publicly traded company in February 2012, when it filed to sell shares on the stock market. The service is on track to be the largest Internet initial public offering ever — trumping Google’s in 2004 or Netscape’s nearly a decade before that. In its filing, Facebook said it was seeking to raise $5 billion.

On May 3, Facebook set the estimated price for its I.P.O. at $28 to $35 a share, according to a revised prospectus. At the midpoint of the range, the social networking company is on track to raise $10.6 billion, in a debut that could value the company at $86 billion.

The company is expected to begin trading on the Nasdaq, under ticker “FB,” on May 17 or May 18.

Facebook’s I.P.O.: Beginning a New Chapter

If all goes well, Facebook will go public in an I.P.O. that could value it at nearly $100 billion. One hundred billion dollars — for a company that, eight years ago, didn’t even exist.

Facebook’s I.P.O. will begin a new chapter — indeed, a new volume — in one of the great business narratives of our time. It will also make Mr. Zuckerberg almost impossibly rich. In an instant, his stake could be worth upward of $18.7 billion.

Mind-boggling figures aside, the question on many minds is this:Is Mr. Zuckerberg really ready for this? Is he — there’s no sugarcoating it — grown up enough to lead a public corporation that is more valuable than McDonald’s or Goldman Sachs? The answer to those questions will determine the future of Facebook, as well as the fortunes of its new, public shareholders. For the first time, Mr. Zuckerberg will be judged, in real time, by a relentless stock market. And that market, as chief executives everywhere know, is merciless.