Facebook could be going public at stock exchange soon

Facebook may be taking social media to the stock exchange, as a public debut in the coming week is a possibility, according to reports from The Wall Street Journal.

Facebook has not officially confirmed the move yet, but experts speculate the company’s IPO, or initial public offering, could launch Mark Zuckerberg’s creation into the realm of the largest worldwide public companies. Making the transition to a publicly traded company could raise about $10 billion and cause Facebook to be valued at about $75 billion to $100 billion, according to The WSJ.

The company could file initial paperwork with the Securities and Exchange Commission as early as Wednesday, according to The WSJ, and the first public offering of stock could be available in three to four months.

Experts in the matter said Facebook could use Morgan Stanley as the lead underwriter for the project, the WSJ reported. This would make Morgan Stanley responsible for any unsold shares and force them to financially support Facebook.

The motion, like any IPO move, could potentially generate millions of dollars in banker fees and could bring new clients to Wall Street.

When a single company becomes publicly traded, however, “there tends not to be any impact on the entire United States economy,” said Jay Zagorsky, an adjunct assistant finance professor at Boston University’s School of Management, in an email to The Daily Free Press.

“In general, most of the early investors will simply exchange Facebook shares for cash and then immediately reinvest that amount in another stock, bond or new company,” Zagorsky said. “Unless people spend a huge percentage/amount of their windfall, there is not much impact of a company going public on total gross domestic product.”

Facebook currently makes most of its profits through advertising.

However, federal law requires companies with at least $10 million in assets and 500 or more private shareholders to disclose quarterly financial reports and other information, according to the SEC.

Facebook reached its 500 mark in 2011, according to a Facebook press release, and “therefore expects to start filing public financial reports no later than April 30, 2012.”

As a private company, Facebook is not required to disclose its accounts to the public. Catherine Curran, an SMG sophomore, said that doing so could hurt the company.

“Most companies don’t like to disclose their accounts to the public before becoming an IPO because it can possibly decrease the value of the stock,” Curran said.

Some BU students said Facebook could represent a smart investment choice.

“I don’t think Facebook can really get an bigger than it already is,” said Bhrighde Kehoe, a BU College of Arts and Sciences freshman. “I would probably invest in it for awhile and then sell it once it reaches its peak.”