Facebook filed a second amendment to its initial public offer registration with the Securities Exchange Commission. A great deal of the filing includes developments that the public has already learned of since the original registration February 1. Following are highlights.
The company doubled its line of credit to $5 billion and obtained an additional bridge loan of $3 billion to provide funds for employee stock vesting. The lead lenders on the latter are JPMorgan and Morgan Stanley. All 10 of the line of credit financers are on the IPO underwriting team.
The IPO underwriting team has expanded from six banks to 31, with the additions including Citigroup, Credit Suisse, Deutsche Bank, RBC Capital and Wells Fargo.
Facebook acknowledged a possible legal duel with Yahoo, which wants the social network to pay licensing fees on 13 patents. No further action has occurred on this front yet, but the social network acknowledges that additional legal threats from other parties might emerge as the IPO approaches.
New advertising products announced at the Facebook Marketing Conference could boost revenues and thus improve investment returns on the forthcoming stock offering; conversely, all of these new innovations bear some risk because they are unproven.
Facebook acknowledges that fake or duplicate accounts account for five to six percent of the monthly active user base, or about 42.5 million to 50.7 million.
While the original IPO registration had stated that Facebook Chief Executive Officer Mark Zuckerberg controls the majority of voting shares in the company, a new section at the front of the filing reiterates this information that was previously buried in a list of risk factors.
Facebook’s first amendment to the IPO registration, filed February 8, had spelled out that the social network had an exclusivity agreement with Zynga, but now the more recent filing points out that the launch of Zynga.com signals the two depend less on one another, even though you still need to have a Facebook account in order to play anything on the gaming portal.
The social network said it had 432 mobile users in December 2011, an increase from the 425 million stated in the original registration document. And over 13 percent of the mobile users access the site exclusively from handheld devices.
The company said in the S-1 that 15 million people used Facebook Credits during 2011.