Announced today on CNBC, Facebook will likely have their much anticipated IPO during the first quarter of 2012. Although a price per share has not been discussed (as that is over a year away) the company is projected to be valued at over $100 billion.
As required by the United States Securities and Exchange Commission (SEC), any private business that has more than 500 private investors must disclose financial information. That will most likely cause the release of this information as Facebook is expected to have over 500 private investors by the end of 2011. Investors will have little time to evaluate the financials before they go public. (Although we don’t need much time to do our due diligence to know Facebook is an investors dream).
We all saw the demand for the social media IPO when LinkedIn (LNKD: NYSE) went public last month. Opening at $45 per share, they quickly rose well over $100, most likely due to the craze in social media IPO’s. (One can only imagine where Facebook opens and where they sky rocket to within the first day of trading).
Ken Wisnefski, founder and CEO of WebiMax, discussed in an official company press release last month the status of social media IPOs.
Regarding Facebook, Wisnefski stated “Additionally, Facebook has value to clients in the business to consumer space but misses the mark with clients in the business to business space, which has been a huge source of revenue for Google. Privacy concerns aside, Facebook is poised to be the biggest IPO since Google, however the growth will slow down at some point, but more opportunities for monetization will occur. I think one can clearly expect that Facebook will far exceed the rampant explosion that LinkedIn has recently seen”.
Kenneth C. Wisnefski, serial web Entrepreneur, and founder and CEO of WebiMax, the #1 rated SEO firm in the United States and Australia, discusses the success of social media and the recent IPO of such firms.
“LinkedIn, the business to business answer to Facebook has seen rampant growth in the short term due to some very well planned strategic monetization programs that have been put in place”, discussed Wisnefski.
“Its immediate rise in value suggests investors are hungry for “new media” stocks and are more focused on the hype that the pure valuation”.
As part of marketing strategies, LinkedIn is often not utilized to a great degree and its growth has seemed to be more outside of the U.S. than within.
“Caution exists, however, due to the fact that the company seems have already peaked. While all monetization areas have seemingly been put in place, I ask “where is the growth potential”?
Turning our focus to Facebook (who plans their IPO in April 2012), they represent seemingly the gem or all upcoming IPOs. Since its inception, Facebook has gained massive traction over the past few years and has ingrained itself in to our daily lives.
“Its sheer volume suggests the opportunity for further revenue growth but it’s privacy concerns raise questions whether it can truly grow at the rate that is anticipated to meet or exceed its lofty valuation”, discusses Wisnefski. “For consumer based businesses, Facebook has become an integral part of marketing campaigns. The major discussion around these campaigns is the notion that the demographic focusing that can be done allows users to market to the very core sector they wish to reach”, concludes Wisnefski.
The caveat to this has been the fact that unlike Google’s monetization through Google AdWords, advertising on Facebook is more of a “passive” branding effort as people banter with their friends rather than “proactively” searching out terms on Google that provide a more actionable response.
“Additionally, Facebook has value to clients in the business to consumer space but misses the mark with clients in the business to business space, which has been a huge source of revenue for Google. Privacy concerns aside, Facebook is poised to be the biggest IPO since Google, however the growth will slow down at some point, but more opportunities for monetization will occur. I think one can clearly expect that Facebook will far exceed the rampant explosion that LinkedIn has recently seen”, concludes Wisnefski.
Small businesses have found Groupon to be a true windfall of opportunity.
“Consumer based businesses have told me that Groupon has provided them with an opportunity to gain new customers at a very rapid rate of return. The key to Groupon has been that savvy businesses understand that their initial campaigns will likely end up being nearly break even efforts by the time they pay for the actual advertisement, but the ability to retain customers beyond that initial campaign is where the true value lies”, states Wisnefski.
With its ability to focus on very specific demographic areas and a track record of success, Groupon has many additional areas of potential revenue generation and would seem to be the best overall value of all the upcoming IPOs.
Twitter announced their IPO is scheduled for some time in 2012. Their growth has seemed to slow down considerably and its attempts at monetization have actually been less fruitful.
“Niche industries have evolved such as sites like Ad.ly that leverage Twitter to promote their celebrity endorsements but unfortunately have little bearing on the actual revenue that Twitter generates. My expectation is that opportunities for additional revenue streams will surface in the near future and that Twitter will become a very strong opportunity as it expands”, states Wisnefski.
Twitter has seemingly always played second fiddle to Facebook but in the IPO world, playing second fiddle to the expected boom that Facebook will see, isn’t a bad thing!
“It is also clear that investors are hopeful that Social Media will run a similar course that Google has but I would be quick to caution this. So many companies rely on Google and this has been evidenced by the recent drop off of Demand Media, which as Google changed their algorithms, their traffic and overall value has suffered immensely”, concludes Wisnefski.
Google’s interest in Social Media has also been evident by their utilization of aspects of Facebook and Twitter postings and tweets directly in to their search results. While none of the companies in the Social Media space have the overall long term outlook that Google has, all of them demonstrate the next wave of investing.
Since its inception in 2008, WebiMax has established themselves as a global leader in search engine optimization, social media, web design, pay-per-click management, reputation management, and e-commerce solutions. With 2011 revenue projected to top a record $15 million, the company is well positioned for their scheduled IPO in 2015. They have over 150 employees, 8 U.S. based, and 4 International offices. Visit (http://www.webimax.com) for more information.
Social Media firm LinkedIn plans their initial public offering (IPO) of common stock on the New York Stock Exchange (NYSE) under the ticker: LNKD at tomorrow’s opening bell. The company will release tonight (Wednesday) in the after-market trading the official share price. Experts expect the price to be between $42-$45 per share. This concerns some investors, however, as the company has a slowing revenue growth and has not released projected profits for 2011. At the offering, however, the company will be valued at $4.11 billion.
So who’s buying and who’s selling? Goldman Sachs will reportedly sell their entire stake of 871,000 shares at the market open. This should drop the share price significantly at the onset. CEO Jeff Weiner stated that he is selling less than 10% of his holdings at the opening bell also.
The outcome of tomorrows IPO will set the tone for the social media market, as investors are eager for social media companies to go public. Facebook is expected to go public in April 2012, and has a present market value of around $70 billion.
Ken Wisnefski, founder and CEO of WebiMax, and an expert in job growth market, sees LinkedIn as a “valuable resource for candidates to network with other professionals, and use to their advantage in seeking employment and building their professional networks”.
Whether or not the market will buy in to the social media company, we won’t know until tomorrow at 4:30pm. Although it is hard to imagine $45 a share to be a stable platform for a company that is lagging in revenue, however investors are eager to take a bite out of the social media IPO market.
It will probably be a tug of war between investor excitement versus a company with not so impressive revenue growth.