Dean Roger Dennis explored Facebook’s much anticipated $100 billion public offering during a short lecture on Feb. 21.
The public offering statement Facebook filed with the Securities and Exchange Commission reveals, for the first time, the impressive $3 billion revenue and $1 billion in profits Facebook took in last year alone, Dennis said. In addition, the public offering statement details founder Mark Zuckerberg’s powerful and enduring role in the company, Dennis commented, observing that the governance structure gives him significant control of Facebook’s operations for the foreseeable future.
Dennis also discussed the potential risks Facebook may face once it goes public. Dennis pointed out that, as with all public offerings, Facebook’s disclosure of its sources of revenue could make it vulnerable to competitors. On the other hand, competitors may have a tough time trying to poach Facebook’s top executives given the generous compensation packages and stock options Facebook offers them, Dennis said.
The company’s future profitability will depend on how much room it has for growth, Dennis observed. With 845 million monthly active users already, Dennis questioned whether Facebook will be able to maintain its estimated $100 billion valuation after going public. Ultimately, he concluded, it is up to potential investors to determine whether Facebook will maintain its dominance in the social media market for years to come.