Notes from the Facebook S-1 IPO Filing

The eagerly anticipated Facebook S-1 IPO filing is finally available on the SEC’s website. Facebook represents the once-a-decade company that truly changes the world (think Google as another one). The Facebook IPO filing, unlike some of the other companies to go public in the last couple quarters, gets so much attention that the most interesting facts have already been shared. I’ll try to share those items along with some less common items that are still very interesting.

Here are notes from the Facebook S-1 IPO filing:

  • Mission: make the world more open and connected (pg. 1)
  • More than 800 million monthly active users (pg. 1)
  • More than 425 million mobile monthly active users (pg. 1)
  • 2.7 billion Likes and Comments per day (pg. 1)
  • CEO has control over key decision making as a result of his control of a majority of our voting stock (pg. 5)
  • Revenue (pg. 4):
    2009: $777M
    2010: $1,974M
    2011: $3,711M
  • Net income (pg. 4):
    2009: $229M
    2010: $606M
    2011: $1B
  • Advertising represents 85% of revenue (pg. 12)
  • Facebook has been or is currently restricted in whole or in part in China, Iran, North Korea, and Syria (pg. 15)
  • Culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results (pg. 16)
  • Zynga accounted for approximately 12% of revenue (pg. 18)
  • If Mr. Zuckerberg controls the company at the time of his death, control┬ámay be transferred to a person or entity that he designates as his successor (pg. 21)
  • 3,200 employees (pg. 23)
  • More money is spent on marketing and sales than research and development showing that most of their ad sales aren’t done via a self-service model (pg. 40)
  • Early revenue (pg. 43)
    Year 1 – $382,000
    Year 2 – $9M
    Year 3 – $48M
  • $2.4 billion in restricted stock unit expense that hasn’t been charged yet (pg. 48)
  • Unsecured $2.5 billion line of credit that’s unused (pg. 57)
  • Television, print, and radio accounted for $363 billion, or 62% of the total advertising market in 2010 (pg. 78)
  • From 2010 to 2015, the worldwide online advertising market is projected to increase from $68 billion to $120 billion (pg. 78)
  • Facebook stores more than 100 petabytes (100 quadrillion bytes) of photos and videos (pg. 90)
  • Facebook.com is largely written in PHP (pg. 90)

Overall, the Facebook S-1 IPO filing is straightforward and detailed. The revenue and profit growth of Facebook over the past eight years is astounding. For potential investors. the fact that Mark Zuckerberg single-handedly controls the company makes for an unusual situation. Facebook deserves to be in the 10x revenue club.

What else? What are your thoughts on the Facebook S-1 IPO filing?

2 thoughts on “Notes from the Facebook S-1 IPO Filing

  1. I read where the speculation is that the company will have a market capitalization, post raise, of $100 billion. So, at $1 billion in 2011 net income, that would place the PE ratio at 100 x trailing earnings.

    A fascinating perspective to me is that your return based on a 100 PE would be 1%. ($1 billion / $100 billion), which is much higher than you will receive on your money market today.

    So, is 100x trailing earnings too high or too low? obviously, time will tell.

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