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Facebook Financials Leaked: Could They Hurt the Zynga IPO?


Gawker claims to have the inside scoop on Facebook's numbers, which could impact Zynga's IPO.

The folks over at Gawker's Gizmodo blog once made an enemy of Apple's (AAPL) iconic former CEO Steve Jobs by playing hard-to-get with a lost iPhone prototype.

Well they're back at work, and this time, Facebook's Mark Zuckerberg may be the one losing his temper.

In a major exclusive, Gawker got its hands on what it claims to be the inside scoop on Facebook's financials, including revenues, profits, operating cash flow, and balance-sheet cash.

Before going further, let's remember that these numbers are unofficial. However, pay attention, and you'll see that they represent headline risk in front of Zynga's (ZNGA) IPO, which prices later today.

So without further, adieu, here is what appears to be the clearest public picture of Facebook's financial position seen yet:

Jan. 2011 – Sept. 2011

Assets: $5.6 billion
Cash/cash equivalents: $3.5 billion
Debt: $0
Shareholder equity: $4.5 billion

Operating cash flow: $1 billion
Revenue: $2.5 billion
Operating income: $1.2 billion
Net income: $714 million

Facebook's been raising money like crazy over the past few years, so the fact that it's got $3.5 billion in cash is no surprise.

But the real takeaway may be slowing growth for Facebook -- a possibility I raised back in June based upon trends in the company's user growth. (See: Why a Facebook IPO Could Flop)

As our neighbors at Business Insider pointed out this morning, year-to-date revenue of $2.5 billion actually looks quite weak in light of media reports throughout the year that suggested Facebook's 2011 revenue would be in the $4 billion range.

Now, Internet advertising is likely to have a seasonably strong fourth quarter, but $1.5 billion just isn't in the cards based upon the historic seasonality of companies like Google (GOOG).

Again, we can't trust these numbers until someone from Facebook comes out and says they're true, and there's no chance of that happening.

But think about sentiment towards Internet and social media IPO's following the weak performances of new issues like Groupon (GRPN), Pandora (P), and LinkedIn (LNKD).

Investors are already concerned by Zynga's slowing revenue growth, so I'd imagine they're not interested in hearing about weak revenues at Facebook. Why? Because Facebook users generate almost all of Zynga's revenues, so it's not at all difficult to connect the two companies' fates.

Therefore, even though there's little chance of Facebook confirming Gawker's numbers, the prospect of a major slowdown at Facebook could most definitely impact reception of Zynga's IPO.

Remember -- traders are cranky and we are in a headline-driven market. Something doesn't have to be true to hurt.

Stay tuned -- we're headed for one interesting Friday!

Twitter: @MichaelComeau

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