Facebook’s amended IPO filing has revealed 25 additional names of financial institutions. Facebook has successfully managed to secure a US$ 5 Billion Credit line by adding 25 more Financial companies, both large & small. The total number of parties at stake here has now gone up to 31. This step effectively added US$ 3 Billion. Furthermore, Facebook hopes to leverage this to raise capital to pay taxes on the Restricted Stock Units (RSUs) of its 3,200 employees.
The employees may choose to invest six months after the company’s IPO is released. Rumor has it that the IPO may be released in May 2012.
Though Facebook has grown tremendously, the IPO filing with the U.S. Securities and Exchange Commission (SEC) does reveal many blind spots to its famed size of subscriber base pegged at 845 Million. Facebook has confirmed that @ 6% of its users are false or duplicate accounts. It further estimated that @ 5% of “Usage” may be a result of mobile applications automatically logging on with no user intervention. Facebook in its run up to one of the largest valuations in history has met few hurdles in its path. Yahoo recently demanded royalties for usage of its patented technologies. While Yahoo has maintained a neutral stand, it also made it clear that it may resort to legal proceedings if talks fail.
Why has Facebook added so many institutions? The answer lies in Facebook’s Strategy. More banks ensure deeper financial coverage. Furthermore, it has also added several smaller financial firms. These will help Facebook to gain a higher spread of its shares. The countdown to the filing has made Facebook own up some interesting tidbits too. It acknowledged Orkut as a contender.
We think there will be more to come, till Facebook finally rings in its IPO. Stay Tuned.