It looks like Gideon Yu will need to make a major status update on his Facebook page. Yesterday, according to the Wall Street Journal (a paid publication), he left his spot as CFO of the company.
As should be no surprise, the move has caused lots of buzz (yes, Facebook has an uncanny ability to keep up the buzz machine). Basically, Facebook wants to find a CFO who has public company experience.
OK, if Facebook is prepping for an IPO, isn't this somewhat quixotic? After all, the IPO market has been mostly dead, especially with the punishing credit crunch.
Yet again, some companies can excite investors in any type of market. Keep in mind that Google (NASDAQ: GOOG) came public in a so-so period (and it was during the summer as well!)
Something else: This week, the red-hot Chinese online gaming company, Changyou, is expected to hit the public markets. If the offering does well -- and there are signs that it will -- then this could further help make the case for a Facebook IPO.
Moreover, Facebook could use a slug of cash. Growth can be expensive -- in terms of headcount, infrastructure and so on (some companies implode because of growth). And Facebook's investors will likely want some liquidity.
However, it will probably take several months to retain a top-notch CFO (and another couple months to get up to speed on things). If the company does plan to go public, it could easily take six months to get through the regulatory morass.
In other words, don't expect an IPO until at least the fall.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
4-01-2009 @ 10:26AM
veyron3k3 said...
At least google had a business model, how is facebook going to make money?
4-01-2009 @ 11:09AM
ron2009 said...
Agree with veyron3k3. It looks like facebook already like a public company. They have great salary (average $94K http://www.salarylist.com/all-real-jobs-salary-at-facebook-inc.htm Higher than Google) and benefit. It is really different than Google when it started. I don't know if they have same outcome
4-01-2009 @ 11:11AM
Iridium said...
In La-La land you don't need a business model or even ever have made a dime to be worth billions in the stock market.
Facebook can never make money because it can never charge for its services. It can only make money through advertising which nobody actually looks at.
Doesn't matter though a Facebook IPO will generate billions.
4-02-2009 @ 9:22AM
leetp74 said...
Face book is brilliant, and is prepared to make billions. To date, face book has over 200 million users and they expect to double this number in the next few years. Once they hit their mark, they will start to charge a low yearly fee. At 20 dollars per year which is only $1.67 per month they will make an initial 4 billion per year making it one of the most profitable companies in the world!!! This comes from a C E O in his twenties. Fortune five hundred companies take notice!
4-02-2009 @ 9:39AM
thugtheologian said...
As soon as they start charging, IM OUT! And many will do the same. Ugh, I can't wait to start my company. Changing the way you use the internet.
4-02-2009 @ 11:37AM
amberabcg said...
Before they go public, I hope they rework their new format. I really don't need to know when each of my contacts takes the 'what beer are you' quiz. Status updates; just give me status updates! Then...I'll buy stock and perhaps pay for the networking service, too.
4-02-2009 @ 11:54AM
muffinri said...
who gives a shit