Feeds

Banks toss $8bn into Facebook's lap ahead of IPO

Not worried that FB's coughed to having fake users

Security for virtualized datacentres

Facebook has admitted that some of its 845 million accounts might be fake or duplicated user identities, but that doesn't seem to be worrying the banks since they have doubled the social network's loans to $8bn to take care of its market debut.

Facebook said in additional filings to the Securities and Exchange Commission (SEC) that it now has secured a $5bn credit facility for "working capital and other general corporate purposes" – up from a previous promise of $2.5bn. And just in case that doesn't quite cover things, it also secured a bridge loan, which will give it access to an additional $3bn specifically to fund its tax obligations.

After some pundit chatter about whether Facebook really had the number of active users it was claiming it had, the firm admitted that it couldn't really know for sure that all of its 845 million users worldwide were individual accounts.

"There may be individuals who have multiple Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behaviour," the filing conceded.

"We estimate that false or duplicate accounts may have represented approximately 5 to 6 per cent of our monthly active users as of December 2011."

In the case of mobile users, canny folk pointed out that Facebook apps might be contacting the social network's servers for updates automatically without the user being active at all. Facebook also acknowledged this issue, but said it wasn't a big problem in its user count.

"We estimate that less than 5 per cent of our estimated worldwide daily active users as of December 31, 2011 and 2010 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on our estimate of worldwide monthly active users and mobile monthly active users," the filing said.

Facebook also had to point out that, since it last spoke to the SEC, it had started to have a little problem with Yahoo!, which is now claiming that the social network is infringing on some of its patents and it wants some licences fees now please, or it'll see Facebook in court.

"We presently are involved in a number of lawsuits, and as we face increasing competition and gain an increasingly high profile, including in connection with our initial public offering, we expect the number of patent and other intellectual property claims against us to grow," Facebook said.

"For example, on February 27, 2012, we received a letter from Yahoo! Inc that alleged that a number of our products infringe the claims of 13 of Yahoo’s patents.

"We are still in the process of investigating the allegations contained in the letter. To date, Yahoo has not commenced any legal action against us, but it may do so in the future," it added.

Clearly this risk isn't bothering Wall Street too much though, since with its 25 new underwriters, Facebook now has pretty much the whole Street backing its coming out party. The social network has most of the big boys in its stable, as well as some of the smaller financial houses, including Morgan Stanley, JP Morgan, Goldman Sachs, Merrill Lynch, Deutsche Bank and Wells Fargo, to name a few.

Facebook now has a total of 31 underwriters, which are the banks that get potential investors interested in a new issue and sell the stocks, guaranteeing a price for a certain number of the shares. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.