Facebook doesn't know what to do with the money [FACEBOOK S-1]

Facebook is raising $5 bn dollars in its IPO, according to VentureBeat, but that doesn't mean the social media company needs the money. In an interesting passage in its S-1, filed yesterday, Facebook reveals:

The principal purposes of our initial public offering are to create a public market for our Class A common stock and thereby enable future access to the public equity markets by us and our employees, obtain additional capital, and facilitate an orderly distribution of shares for the selling stockholders. We intend to use the net proceeds to us from our initial public offering for working capital and other general corporate purposes; however, we do not currently have any specific uses of the net proceeds planned. We may use a portion of the net proceeds to us to satisfy a portion of the anticipated tax withholding and remittance obligations related to the initial settlement of our outstanding RSUs, which will become due approximately six months following the completion of our initial public offering. Additionally, we may use a portion of the proceeds to us for acquisitions of complementary businesses, technologies, or other assets. However, we have no commitments with respect to any such acquisitions or investments at this time. [All emphasis is mine and is not in the filing.]

Okay, so let's take a look at this. Facebook's major goal here isn't to fuel an acquisition frenzy or pump an astronomical amount of money into new product development or market entry. In creating ‘a public market for our Class A common stock', Facebook is setting up what follows. It wants ‘future access to public equity markets', for example to raise more capital later. Also, it wants to make sure that all those employees, who have been waiting patiently, can get a little liquidity. The mention of ‘working capital and other general corporate purposes' is pretty much standard.

What's revealing, however, is this: ‘we do not currently have any specific uses of the net proceeds planned.'

Can you imagine what it feels like to have $5 bn and no idea how to spend it?

What's particularly disturbing is that Facebook has a laundry list of things to spend it on, including generating revenue from its mobile business, but it obviously can't outline that stuff in the ‘use of proceeds' section.

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