Investors who are debating whether to buy shares in Facebook after its monster initial public offering later this year finally will be able to review the company’s financial results next week when the social-networking giant files its prospectus.
Earlier Friday, The Wall Street Journal reported Facebook is expected to file its IPO documents on Wednesday, for an IPO with an estimated valuation of $75 billion to $100 billion. Read more about Facebook’s plans.
There are some facts that investors learned last year, based on the data that came out during the botched Goldman Sachs private placement deal. Investors learned last January that Facebook is remarkably profitable, with an operating margin of roughly 48% for the first nine months of 2010.
Wall Street analysts made many comparisons to the results of a young Google Inc. at the time of its IPO. Read more about first glimpse of Facebook’s financials.
So while the social network, which now has over 800 million users, is likely going to continue to show strong financial metrics, investors should also look for any data about how much time users are spending on the site. One question is where those trends are heading, especially with a slew of recent changes the social network has imposed on its users.
Once a clean, simple design, over the last year Facebook has become more cluttered, with a constantly updated news ticker in addition to the main news stories. Now the company is forcing users to adopt its Timeline feature for their profiles, a move that has fueled an outcry among many.
Facebook has instigated many changes over the years, and raised endless controversies with its privacy policies, ending up with a Federal Trade Commission settlement last year. Read Facebook and the FTC.
But are its users so addicted to the free social network that they will continue to visit in droves and increase their time on the site, in spite of their complaints? Or are there any signs yet of consumer fatigue? That is a question advertisers consider, and one investors should gauge as well.
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