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"By now, you've probably seen the latest status update on Facebook's IPO, and it's a doosey: When the company goes public it will raise $10 billion, bringing its valuation to $100 billion \nWhile the value of raising $10 billion is self-evident, Facebook has been a private company for seven years or so and seems to be humming along quite nicely. Why do Mark Zuckerberg and Co. want to open his books for investors and invite rude questions from analysts?\nWe tackled that question and more below, which is designed to be a primer for that most-anticipated of all social media IPOs.\n\n\nUPDATE from Jan. 27: Facebook to File for IPO Next Week [REPORT]\n\nWhy is Facebook going public?\nThere are several reasons why a company typically goes public. In a recent paper by professors James Brau and Stanley Fawcett of Brigham Young University, the two outlined the usual motivations: To raise capital and to enrich the company's founders and insiders. However, Facebook's situation is a bit different. For Facebook, a better question might be \"Why are they going public now as opposed to a couple of years ago?'\" \nOne major reason is that private trading in the company is pretty much maxed out. Under U.S. laws, once you get 500 or more private shareholders, you have to publish detailed data about your company's financial performance. Private trading in Facebook as well as Zynga, Twitter and the pre-IPO LinkedIn also drew scrutiny from the SEC last December. \nIn addition to the feds, though, Facebook also has to content with a rivalry from Google+. As The Economist notes, \"Facebook will want to seek a listing before rivals erode its lead in the social-networking sphere.\"\nFinally, going public brings a set of headaches, which we'll illustrate in the next question.\nWhat's the downside of going public?\nThere are a few, mostly the loss of privacy and scads of red tape. Facebook will now have to report quarterly and annual earnings as well as more juicy information, like the amount of shares that executives in the company hold.\n\nSEE ALSO: How Does Facebook Compare to the World\u2019s Biggest IPOs?\nAnother issue is Sarbanes-Oxley, the post-Enron reform Act that President George W. Bush signed into law in 2002. SOX, as it's known, provides a new level of lawyer- and accountant-approved documentation for public firms and is to blame for the decline in U.S. IPOs over the last decade. However, proponents say SOX makes U.S. businesses more competitive because it forced American companies to clean up their books.\nWhen will we know the exact value of Facebook's shares? \n\n\n\n\nMost likely, not until the night before Facebook goes public. Until then, Facebook will have to file an S-1 form with the SEC and then can file various amended versions (S-1/As), none of which will have much in the way of compelling information. \"It's boilerplate,\" says Brau of the S-1s and amended S-1s. \"It will be missing a lot of info.\" Pricing information will be included in the final S-1/A, which will be made public just before Facebook shares are available.\nPricing will also depend on how Facebook brings its shares to the market. The typical course is to go with a firm commitment offering, which would offer shares at a set price to the underwriter. This can be a sweet deal for the underwriter if the shares are underpriced and is considered to be leaving money on the table for the about-to-go-public firm. Another option, made popular by Google's 2004 IPO, is to offer shares via an auction. It's not clear which route Facebook will take.\nWill this be the biggest tech IPO ever?\nDefinitely. The next-largest tech IPO ever is one for Infineon, a German company that raised $5.9 billion in 2000. (Google's IPO, which raised $1.9 billion, is number six on the list.) Facebook's will hardly be the biggest IPO ever, though. That honor belongs to either General Motors, which raised $23.1 billion in 2010 or Nippon Telegraph, which raised $29.8 billion in 1987, in inflation-adjusted dollars.\nHow does Facebook compare to the world's biggest IPOs?\nNote: The proceeds are recorded in actual dollars at the time of public offering, and are not adjusted for inflation.\n\n\nThe World's Biggest IPOs: Where Does Facebook Fit In?\n\n\n\n\n\n\n\n1. General Motors\n\n\nHeadquartered in Detroit, MI, GM owns Chevrolet, Buick, Cadillac and GMC.\nProceeds: $23.1 billion\nYear: 2010\nImage courtesy of Flickr, Crouchy69\n\n\n\n\n\n\n\n\n\n\n\n2. Agricultural Bank of China\n\n\nThis commercial bank of China provides corporate and retail banking products and services, and ranked 141st in global Fortune 500 companies in 2010.\nProceeds: $22.1 billion\nYear: 2010\nImage courtesy of Wikimedia, Hwangxiheng\n\n\n\n\n\n\n\n\n\n\n\n3. Industrial and Commercial Bank of China\n\n\nBased in China, the ICBC provides financial services to 4.12 million corporate clients and 259 million individual customers.\nProceeds: $21 billion\nYear: 2006\nImage courtesy of Wikimedia, \u9648\u5C11\u4E3E\n\n\n\n\n\n\n\n\n\n\n\n4. American International Assurance\n\n\nAIA is a major insurance company based in Hong Kong.\nProceeds: $20.5 billion\nYear: 2010\nImage courtesy of Wikimedia, Terence Ong\n\n\n\n\n\n\n\n\n\n\n\n5. Visa\n\n\nVisa is a global payments technology company that specializes in digital currency replacements.\nProceeds: $19.7 billion\nYear: 2008\nImage courtesy of Flickr, H\u00E5kan Dahlstr\u00F6m\n\n\n\n\n\n\n\n\n\n\n\n6. NTT Mobile\n\n\nNTT Mobile is one of Japan's leading providers of mobile, data and multimedia services.\nProceeds: $18.1 billion\nYear: 1998\n\n\n\n\n\n\n\n\n\n\n\n7. Enel\n\n\nEnel Green Power is an international corporation focused on renewable energy.\nProceeds: $16.6 billion\nYear: 1999\n\n\n\n\n\n\n\n\n\n\n\n8. Nippon Telegraph and Telephone\n\n\nWith total assets valued at $7.57 trillion, NTT is a Japanese telecommunications company.\nProceeds: $13.7 billion\nYear: 1987\nImage courtesy of Wikimedia, Lover of Romance\n\n\n\n\n\n\n\n\n\n\n\n9. Deutsche Telekom \n\nGerman Deutsche Telekom is the leading telecommunications company in Europe and also owns T-Mobile.\nProceeds: $12.5 billion\nYear: 1996\n\n\n\n\n\n\n\n\n\n\n\n10. Bank of China\n\n\nBased in China, the bank offers financial services in 31 different countries.\nProceeds: $11.2 billion\nYear: 2006\nImage courtesy of Flickr, Taylor McConnell\n\n\n\n\n\n\n\n\n\n\n\n11. Dai-ichi Mutual Life Insurance\n\n\nDai-ichi is one of the largest life insurance companies in Japan.\nProceeds: $11.2 billion\nYear: 2010\nImage courtesy of Wiiii\n\n\n\n\n\n\n\n\n\n\n\n12. Rosneft\n\n\nRussian-based Rosneft is a hydrocarbon, petroleum and petrochemical discovery and production company.\nProceeds: $10.65 billion\nYear: 2006\n\n\n\n\n\n\n\n\n\n\n\n13. AT&amp;T Wireless\n\n\nAT&amp;T is the second largest wireless communications company in the U.S.\nProceeds: $10.6 billion\nYear: 2000\nImage courtesy of Flickr, masck\n\n\n\n\n\n\n\n\n\n\n\n14. Telstra\n\n\nBased in Australia, Telstra is one of the country's most widely used telecommunications companies.\nProceeds: $10.2 billion\nYear: 1997\n\n\n\n\n\n\n\n\n\n\n\n15. Facebook\n\n\nBased in Palo Alto, CA, Facebook is social networking service made up of over 800 million users.\nProceeds: Estimated $10 billion\nYear: projected April 2012\nImage courtesy of pshab\n\n\n\n\n\n\n\n\n\n\n\n16. East Japan Railway Co.\n\n\nHeadquartered in Tokyo, Japan, East Japan Railway Co. is the largest passenger railway company in the world.\nProceeds: estimated $9.9 billion\nYear: 1993\nImage courtesy of Wikimedia, Cassiopeia_sweet\n\n\n\n\n\n\n\n"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2011/11/30/facebook-ipo-guide/>