Facebook lifts IPO price range as interest rises
Source: Agencies |
May 16, 2012, Wednesday
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Print Edition
Print Edition
FACEBOOK yesterday increased the price range at which it plans to sell stock to the public, as investor enthusiasm in the offering continued to mount and boost the potential value of the world's most popular social network.
The Menlo Park, California-based company said in a regulatory filing that it now expects to sell its stock for between US$34 and US$38 per share, up from its previous range of US$28 to US$35. At the upper limit of US$38 per share, the sale would raise about US$12.8 billion.
The initial public offering may complete late tomorrow and begin trading on Nasdaq on Friday under the ticker symbol "FB."
The increased range is a sign of high demand from investors to own a piece of the world's most popular social network. The IPO is the most hotly anticipated in years and would value Facebook at more than US$100 billion.
Facebook is selling 180 million of its shares in the IPO. Another 157 million shares are coming from existing stockholders, including the company's earliest investors and CEO Mark Zuckerberg.
Even after the IPO, Zuckerberg will remain Facebook's single largest shareholder. And he will control the company through 57 percent of its voting stock.
The IPO may be the largest ever for an Internet company. It is expected to raise more than 10 times as much as the US$1.67 billion raised in Google Inc's 2004 IPO.
At a value of US$38 per share, the high end of Facebook's expected range, Facebook would generate US$6.84 billion on its shares. Existing stockholders would collectively make US$5.98 billion.
Facebook has more than 900 million users who log in at least once a month.
Even at the higher price range, it's going to be tough for the company's fans and everyday investors to get in on the IPO. Most of the shares are expected to go to people with connections to the company or large, active accounts with one of the big banks or brokerage firms directly involved in the stock sale.
Morgan Stanley leads the team of 33 underwriters selected for the Facebook offering, followed by JPMorgan Chase and Goldman Sachs.
The inclusion of online broker E-Trade Financial Corp as an underwriter was seen as a glimmer of hope that Facebook might make more shares available than usual for retail investors through discount brokerages. But chances of getting any are very slim regardless.
Analysts said there's so much interest in Facebook's stock that some underwriters closed their books as early as yesterday. This means they won't be taking any more orders from potential buyers.
In its filing yesterday, Facebook also adjusted the timetable for finishing its US$1 billion purchase of Instagram, saying it expects the deal to close sometime in 2012.
The Menlo Park, California-based company said in a regulatory filing that it now expects to sell its stock for between US$34 and US$38 per share, up from its previous range of US$28 to US$35. At the upper limit of US$38 per share, the sale would raise about US$12.8 billion.
The initial public offering may complete late tomorrow and begin trading on Nasdaq on Friday under the ticker symbol "FB."
The increased range is a sign of high demand from investors to own a piece of the world's most popular social network. The IPO is the most hotly anticipated in years and would value Facebook at more than US$100 billion.
Facebook is selling 180 million of its shares in the IPO. Another 157 million shares are coming from existing stockholders, including the company's earliest investors and CEO Mark Zuckerberg.
Even after the IPO, Zuckerberg will remain Facebook's single largest shareholder. And he will control the company through 57 percent of its voting stock.
The IPO may be the largest ever for an Internet company. It is expected to raise more than 10 times as much as the US$1.67 billion raised in Google Inc's 2004 IPO.
At a value of US$38 per share, the high end of Facebook's expected range, Facebook would generate US$6.84 billion on its shares. Existing stockholders would collectively make US$5.98 billion.
Facebook has more than 900 million users who log in at least once a month.
Even at the higher price range, it's going to be tough for the company's fans and everyday investors to get in on the IPO. Most of the shares are expected to go to people with connections to the company or large, active accounts with one of the big banks or brokerage firms directly involved in the stock sale.
Morgan Stanley leads the team of 33 underwriters selected for the Facebook offering, followed by JPMorgan Chase and Goldman Sachs.
The inclusion of online broker E-Trade Financial Corp as an underwriter was seen as a glimmer of hope that Facebook might make more shares available than usual for retail investors through discount brokerages. But chances of getting any are very slim regardless.
Analysts said there's so much interest in Facebook's stock that some underwriters closed their books as early as yesterday. This means they won't be taking any more orders from potential buyers.
In its filing yesterday, Facebook also adjusted the timetable for finishing its US$1 billion purchase of Instagram, saying it expects the deal to close sometime in 2012.
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