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Facebook To Raise $5 Billion From Initial Public Offering
With more than 800 million users worldwide, Facebook is second only to Google as the most visited website on the Internet.
But with plans to raise an initial $5 billion from its first IPO, analysts2 say the company is poised3 to become one of the richest.
Equity4 analyst1 Anupam Palit at Greencrest Capital says when it comes to social media, nothing even comes close to Facebook.
"It is the biggest company in this space and we believe what makes it very unique from every other company that went public last year in this space is that it is very, very profitable," said Palit.
How profitable? Early estimates suggest the social network is worth between $50 to $100 billion. David Kirkpatrick is author of The Facebook Effect:
"Will Facebook's IPO be the biggest IPO in American history, probably not, but it will certainly be by far the biggest Internet or technology IPO we've ever seen," said Kirkpatrick.
And when ticker symbol FB starts trading a few months from now, it could make Facebook founder5 Mark Zuckerberg - at 27 - one of the world's youngest billionaires.
Institutional investors6 are likely to get the first shot at buying Facebook stock. But asset manager Jim O'Shaugnessy says that's not such a bad thing.
"Many IPO's come out being very, very overvalued because they get so hyped up and investors are so taken in by the story that they're willing to pay any amount just to be able to get into the stock," said O'Shaugnessy. "That generally translates to being very overvalued. So we generally tell investors that they should wait, probably a good full year before they look at buying stock that was recently IPO'd."
Market performance for Internet IPO's often does not live up to the hype. The most recent - LinkedIn, Groupon and Zynga, all saw share prices plummet7 as much as 25 percent after going public.
There were similar doubts about Google when it went public in 2004. Back then Google stock sold for $84. Today it's worth almost $600 a share.
Despite the risks, analysts say there's no shortage of investors willing to take a chance on the next big thing.
1 analyst | |
n.分析家,化验员;心理分析学家 | |
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2 analysts | |
分析家,化验员( analyst的名词复数 ) | |
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3 poised | |
a.摆好姿势不动的 | |
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4 equity | |
n.公正,公平,(无固定利息的)股票 | |
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5 Founder | |
n.创始者,缔造者 | |
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6 investors | |
n.投资者,出资者( investor的名词复数 ) | |
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7 plummet | |
vi.(价格、水平等)骤然下跌;n.铅坠;重压物 | |
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