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Facebook’s IPO paperwork submitted

Company looks to raise $5bn, Zuckerberg will become one of world’s richest men

Facebook has submitted its prospectus for its $5bn IPO.
Facebook has submitted its prospectus for its $5bn IPO.

This year's most highly anticipated IPO has been unveiled, but Facebook has made it clear to investors that it will retain control over the running of the company, as founder and CEO Mark Zuckerberg will continue to hold retain the majority of voting shares, according to Reuters.

Zuckerberg will own 56.9% of the voting shares of the company, which is expected to be worth up to $100 billion when it goes public, and will have economic control of about 28% of the shares. This IPO will make Zuckerberg one of the richest men in the world.

The 27-year-old's ownership position means that Facebook, which is aiming to raise at least $5 billion and as much as $10 billion, will not need to appoint a majority of independent directors or set up board committee to oversee compensation and other matters. The company's ownership structure and bylaws go against shareholder-friendly corporate governance practices put in place in the United States.

Facebook said in the IPO prospectus that it has 845 million monthly active users, generated $3.71bn in revenue and made $1bn in net profit last year, up 65% from the $606 million it made in 2010.

The prospectus showed that 85% of Facebook's 2011 revenue was derived from advertising. Last year, social-gaming company Zynga, creator of Farmville, accounted for 12% of Facebook's revenue.

"We often talk about inventions like the printing press and the television," Zuckerberg said in a letter accompanying the IPO documents, seen by Reuters. "Today, our society has reached another tipping point. There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented."

Zuckerberg's $500,000 base salary will drop to a dollar from 1st January 2013; his 533.8 million shares are worth almost $16bn, based on a per-share value of $29.76 that the company assigned to its restricted stock units on 31st December.

Facebook was previously expected to raise $10bn in what would have been the fourth-largest IPO in US history, after Visa Inc, General Motors, and AT&T Wireless, according to Thomson Reuters data.

Facebook is expected to make its market debut in the middle of the year.