Facebook Set To File For $5 Billion IPO

Social networking giant Facebook was expected to file documents for its long-awaited initial public offering on Wednesday morning, according to a report by International Financing Review (IFR).
IFR said that the 7-year-old company would seek to raise $5 billion. Facebook has chosen Morgan Stanley as the leading bookrunner, occupying the highly-desirable “lead left” slot on the IPO prospectus for the offering.

At $5 billion, Facebook’s IPO would raise less than had been expected, reports had indicated the company might seek as much as $10 billion. A more conservative raise isn’t such a bad idea, given that several recent Internet IPOs have underperformed. Both discount sales website Groupon and web-radio service Pandora saw their stock prices fall after going public.
Facebook officials declined to comment on the report.
So to summarize, we have a company that has questionable profitability but a nosebleed valuation and the optimism over its IPO has lifted the entire sector without discretion.