Facebook is a Delaware Corporation
Back in 2012, we published a blog post about Facebook being a Delaware company and what this meant for its “upcoming” IPO. As you may know, many viewed the IPO in hindsight as a bit of a flop, or at least somewhat disappointing. Regardless, shareholders who jumped in right away are certainly reaping benefits today.
Much has changed in the social media landscape since 2012 and will surely continue to do so year after year. For now, however, Facebook is as big as ever.
Brief History of Facebook, Inc: Infographic
To recap Facebook’s historical value:
- The company, then known as TheFacebook, Inc. (it filed a name amendment to Facebook, Inc. in 2005) was incorporated here in Delaware on July 29, 2004 with 10,000,000 authorized shares of stock @ 0.0001 par value. This was its initial formation by founder by Mark Zuckerberg, still living in his messy Harvard University dorm room.
- By 2006, it reached a valuation of $1 billion. This is the offer Yahoo! made to purchase it, which Facebook declined. A year later, coinciding with the launch of the Facebook Ads platform, the valuation jumped all the way up to $15 billion.
- As the user base continued to grow by leaps and bounds, Facebook reached the $50 billion valuation milestone in 2011, with hundreds of millions of users worldwide. And in 2012, when we published our original article, Facebook was readying for their IPO with a value of $104 billion.
- Through continued innovation, updates, acquisitions and other strategy, Facebook continued its growth, reaching its to-date peak of nearly $630 billion in July of 2018. Today it sits at about $530 billion, having recovered from its poor performance in the second half of 2018, and boasts nearly 2.5 billion users using the service at least once per month.
Visit macrotrends.net for a look at Facebook’s market cap growth since its 2012 IPO.
Over the years, Facebook’s founder, Mark Zuckerberg, has consistently rebuffed mouth-watering buyout offers, including those from Google and Yahoo!, both Delaware Corporations as well.
“Simply put: we don’t build services to make money; we make money to build better services,” Zuckerberg wrote in his letter to prospective shareholders in 2012. “And we think this a good way to build something. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.”
When it came time for Facebook’s IPO, many wondered what that would mean for Zuckerberg’s majority shareholder position, since stock would now be sold to the public. Facebook decided to create two classes of Common Stock: class A and class B. Both classes had a .000006 par value at that time. Class A stock would be publicly traded, while class B would be much more exclusive (for company insiders, including Zuckerberg) and would carry 10 times the voting weight of class A stock. So, even though Zuckerberg offered 30.2 million Facebook shares, he was still the majority stockholder in the company.
Learn more about the flexibility that Delaware corporate law provides when it comes to authorizing different classes of stock.
And if you’d like to go back and look at some articles about Facebook’s IPO and stock prices over time, here are a few we enjoy:
- Facebook’s IPO: What We Know Now (2012)
- Facebook IPO – what it means for Zuckerberg and you (2012)
- Facebook Shares Open At $38.22, Finally Return To IPO Price After A Year Of Turmoil (2013)
- Uber Beats Facebook To $50B Valuation (2015)
And finally, you can see Facebook's SEC listing, including recent Trademark and Patent filings at https://sec.report/CIK/0001326801.
Do you have an idea for the "next Facebook?"
Get started by seeing if your company name is available in Delaware (it's free!):
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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There are 2 comments left for Facebook is a Delaware Corporation
Marvin Conrad Walker said: Tuesday, September 15, 2020seeking facebook 's registered agent
HBS Staff replied: Wednesday, September 16, 2020We are not the Delaware registered agent for Facebook. You can find up to date public information on Facebook by using the Delaware Secretary of State website: https://icis.corp.delaware.gov/ecorp/entitysearch/namesearch.aspx
Dr. Terry L LaFleur said: Friday, September 11, 2020What state is Facebook Incporated in for service of process purposes and who is your designated Person to receive service of process. Alternatively, do you have an agent in SD?
HBS Staff replied: Monday, September 14, 2020Facebook is a Delaware corporation and service of process is done through their Delaware Registered Agent. We are not the registered agent for Facebook; however, you can search the company and identify their registered agent via the Delaware Secretary of State website. Harvard Business Services offers registered agent service in South Dakota, but we cannot assist with service of process for Facebok.