Social networking giant Facebook has lodged documents for a public floatation which will raise at least $5 billion for the Californian company.
But co-founder and chief executive Mark Zuckerberg will exercise almost complete control over the company, leaving investors with little say.
The documents show that Mr Zuckerberg is currently the site's largest shareholder with a 28.4 per cent stake. This will be worth over $25 billion post floatation.
The 27-year-old will control 56.9 per cent of the voting shares.
As Facebook states in its prospectus, Mr Zuckerberg will "control all matters submitted to stockholders for vote, as well as the overall management and direction of our company".
Mr Zuckerberg struck deals with several Facebook investors that granted him voting rights over their shares in all or most situations. Those included Yuri Milner's DST Global, venture capital firm The Founders Fund, and entities affiliated with Technology Crossover Ventures, the IPO filing shows.
Mr Zuckerberg was paid a salary of $500,000 in 2011 and received a bonus of $220,000. His chief operations officer Sheryl Sandberg received a package worth $30.87 million in 2011 but she holds just 0.1 per cent of the company stock.
Facebook generated revenues of $3.7 billion in 2011 and made a pre-tax profit of $1.6 billion according to the S1 form filed with the Securities and Exchange Commission after US markets closed last night.
Advertising accounted for $3.2 billion of revenues last year compared to $1.9 billion in 2010.
Valuing the company at $80 to 100 billion (€60-76 billion) it will be the biggest stock market debut by a Silicon Valley company, dwarfing previous successes including Google and Netscape.
"The $100 billion valuation that's being tossed around just puts it at a level we've never seen," said Jeffrey Sica, chief investment officer of Morristown, New Jersey-based Sica Wealth Management LLC, which oversees $1 billion. "They have to be able to show that not only do they deserve to be at that level, but they have multiple channels to create new revenue."
A number of Irish investors will benefit, including U2 singer Bono, whose Elevation Partners fund invested $210 million in Facebook shares in the secondary market in 2009-10. That investment is set to be worth about $1 billion and will be one of the more prescient investments by Elevation, which has had decidedly mixed results with its portfolio.
Some private clients of stockbroker Davy are also understood to be in line for a Facebook payout through their investment in Tiger Global Management’s funds.
The hedge fund, headed by Chase Coleman (36), has outperformed its peers on internet investments and reportedly holds a 1 per cent stake in Facebook, purchased in 2009.
Tiger Global, and the Davy clients, could see a five or sixfold return on their investments, depending on the success of the IPO.
Allen Co, the New York investment bank which is the largest shareholder in Dublin stockbroker Merrion, is one of the six underwriters of the deal. Morgan Stanley will be the lead underwriter.
Facebook was founded in a Harvard dormitory room in 2004.
The flotation will be the biggest yet by a social networking company, a sector Facebook dominates, leaving earlier dominant web companies such as Google racing to catch up.
Trading in the shares is expected to begin by late May.
A successful Facebook flotation would have knock-on effects for the Irish economy. The company established its European headquarters in Ireland in 2008 and now employs more than 200 staff.
It was reported last month that it was looking to double its office space in the capital.
The proceeds of the IPO are expected to fuel international expansion which could see even further investment in the Irish operations.
But wealthy investors aren't clamouring for a piece of the IPO because some own the stock through private transactions while others shy away from risky technology deals, according to advisers.
"It's kind of the late arrivals who get excited around the time of the IPO," said Jason Thomas, chief investment officer of Aspiriant, whose clients on average have about $10 million under management with the Los Angeles-based firm. "Our clients remember the tech bubble very well, and are appropriately sceptical of being the last money in."
Additional reporting: Agencies
