Facebook: IPO Just a Distraction?

It seemed like a sure thing that is, Facebook would go public in the first
quarter of 2012. The main reason? Well, it has to do with an arcane federal
securities rule that compels companies to start filing quarterly reports when
they have 500 or more shareholders. And yes, Facebook has triggered this
requirement. So, might as well do an IPO, right? Interestingly enough, this was
the strategy for Google 's (NASDAQ: GOOG ) high-profile IPO back in 2004. Even
Microsoft (NASDAQ: MSFT ) did the same thing back in the 1980s. But Facebook
might take another tact. According to a report in Financial Times , it looks
like the company will launch its IPO during the fourth quarter of 2012. Let's
face it, Facebook could do its IPO today and it would be a huge success. The
company does not have to worry about things like market conditions." Across
the globe, investors are hungry for a mega-deal like Facebook's. Based on a
recent report from Reuters , the company doubled its revenues to $1.6 billion
for the first half of 2011 and had a profit of $500 million. It seems highly
unlikely the growth ramp will slow anytime soon as Facebook still is in the
early stages of its monetization efforts. So why delay the IPO? The reason might
be that Facebook's CEO and co-founder, Mark Zuckerberg, wants his team to be
focused on great product development not counting IPO winnings. After all,
Google+ is making inroads in the social networking space. There also are some
newer companies that are getting traction, such as Tumblr. Thus, in such a
hypercompetitive environment, an IPO can be a big distraction. Of course, a
delayed IPO will be a big disappointment for investors as well as fee-hungry
Wall Street investment bankers. However, it could create even more pent-up
demand for the offering. Interestingly enough, the beneficiaries actually might
be companies like Zynga and LinkedIn (NYSE: LNKD ). In a way, they are proxies
for a play on social networking. So enthusiasm is likely to remain fairly robust
for these stocks. But as with anything regarding IPOs, nothing is set in stone.
Hey, a report in The New York Times actually contradicts the Financial Times
story, saying an offering still is targeted for early next year. No doubt, this
kind of buzz is fairly normal stuff. But as for the Facebook IPO, its a near
certainty that it will come public within at least a year from now and it
definitely will be an epic deal. Tom Taulli is the author of "All About Short
Selling" and "All About Commodities." You can also find him at Twitter
account @ttaulli. He does not own a position in any of the stocks named here.