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Facebook Prices IPO At $28 - $35 A Share

Facebook Prices IPO At $28 - $35 A Share
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5/3/2012 6:31 PM ET

Facebook Inc. has set the price range for its initial public offering at $28 to $35 per share, according to a SEC filing on Thursday. The social networking giant expects the much anticipated IPO to raise a maximum of $13.6 billion, which could give the company a market value as high as $96 billion.

A total of 337.4 million shares are being offered in the IPO, with Facebook to sell 180 million shares. Selling shareholders, such as Dustin Moskovitz, Accel Partners, Digital Sky Technologies, are offering about 157.4 million shares, the Menlo Park, California-based company said in the regulatory filing.

Following the IPO, Facebook could become the most valuable internet company at the time of IPO. Google had raised about $1.9 billion from its IPO and had a market valuation of $23 billion in 2004. According to sources, Facebook was looking for a market valuation of $100 billion. However, market experts believe that Facebook will reach that goal in a short time after the IPO.

Meanwhile, Founder and Chief Executive Mark Zuckerberg will offer and sell 30.2 million shares. The substantial majority of proceeds received will be used to pay taxes that Zuckerberg will incur related to exercising of stock options.

Morgan Stanley, J.P. Morgan and Goldman Sachs & Co. are leading Facebook's IPO. The company and the selling stockholders have granted underwriters the right to purchase up to an additional about 50.6 million shares to cover over-allotments. The shares of Facebook will be listed on the Nasdaq under the symbol "FB."

The Facebook IPO has been long awaited event since the hugely successful offering from online professional networking site Linkedln Corp. (LNKD: Quote) in May. The LinkedIn IPO ushered in a new era of internet and social media companies floating on the stock market.

There were a slew of internet companies that made their successful debut on Wall Street after Linkedln, including Zynga Inc. and Groupon Inc., Pandora Media Inc., Renren Inc. and Zillow, Inc.

Facebook was launched in February 2004 by Zuckerberg, along with Havard mates Dustin Moskovitz, Chris Hughes and Eduardo Saverin. It soon touched the one-million mark in users by December 2004, 100 million users in August 2008 and 500 million users by July 2010.

Facebook has about 900 million global users currently, with about 500 million of them logging in every day. Its growth has had a waning influence on businesses of established companies such as Google, Inc. (GOOG: Quote) and Yahoo, Inc. (YHOO).

For the first quarter of 2012, Facebook reported a lower first-quarter profit, as higher costs and expenses outpaced a 45 percent revenue growth. Profit dropped to $205 million from $233 million in the year-ago quarter. Total revenue grew to $1.06 billion from $731 million.

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by RTT Staff Writer

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