Facebook's flotation fever

Facebook Inc, the world's largest social-networking service, is aiming to file for its initial public offering as early as this week, two insiders have said.

The company is discussing a valuation of $75 billion to $100 billion, said the two people, who asked not to be identified because the plans haven't been made public. Timing for the filing is still being discussed and may change, they said.

The IPO would provide funds to help Facebook maintain its expansion and fend off competition from Internet rivals such as Google Inc and Twitter Inc. The company has discussed raising $10billion in the offering, another unidentified source said in November. Facebook may set its price at the low end of the valuation range to entice investors and ensure the stock rises after the IPO.

Facebook is close to hiring Morgan Stanley to handle the deal and Goldman Sachs Group Inc will probably play a "major role" in the IPO, the Wall Street Journal said on Friday. The newspaper was first to report that Facebook may file its paperwork as early as this week.

Shareholders of Facebook faced a three-day suspension of trading on secondary markets on Friday. While buy and sell orders could be made, transactions wouldn't be processed by Facebook's attorneys at Fenwick & West LLC.

Halting the trading, which had allowed employees and early stakeholders to buy and sell shares, didn't mean the filing is imminent. Still, some companies suspend trading ahead of a filing to make sure that investors can't exchange shares until all of the information is public.

A trading halt may also represent an effort by private companies to ascertain how many shareholders they have.

Facebook expects to be required by US regulators to disclose financial results by April 30, if it doesn't go public by then, the company said last year when it announced an investment from Goldman Sachs and other backers. The $1.5 billion investment valued the company at $50billion.

Facebook decided to wait until 2012 for its IPO to give Zuckerberg more time to gain users and boost sales.

Co-founded by Mark Zuckerberg in 2004 in a Harvard University dormitory room, Facebook has amassed more than 800 million users with an easy-to-use website that lets anyone with an Internet connection to construct profile pages, post video and photos and interact with friends. The company has nudged aside competitors such as MySpace Inc and generates sales from advertisers as varied as AT&T Inc, Best Buy Co and Sony Corp.

Questions:

1. Which two companies is Facebook looking to hire to handle the deal?

2. What could a trading halt represent?

3. To this date, how many users has Facebook amassed?

Answers:

1. Morgan Stanley and Goldman Sachs Group Inc

2. An effort by private companies to ascertain how many shareholders they have.

3. Over 800 million.