Facebook has upsized its initial public offering a day after the social network raised its estimated price range, according to a regulatory filing made public on Wednesday.
By selling 421.2 million shares, up 25 percent from what the company had previously indicated, Facebook is now expecting to raise up to about $16 billion.
The company was previously offering 337.4 million shares at a price range of $34 to $38 a share in hopes of raising $13 billion.
On Tuesday, Facebook raised the price range for its IPO from its earlier price range of $28 and $35 per share.
The moves came on the back of strong investor demand despite lingering doubts on the company's long-term revenue generation model. General Motors Co. (GM) had revealed on Tuesday that it will withdraw advertisements on Facebook as they were not generating many leads.
However, the General Motors news is not expected to have much of a negative impact on the demand for the IPO as Facebook is said to have stopped taking orders on Tuesday, two days ahead of its schedule close, after it was flooded with orders. The offering is said to have been oversubscribed, though the scale of oversubscription is not yet known.
The company' shares are expected to begin trading on the Nasdaq Global Select Market under the ticker symbol "FB" on May 18.
Menlo Park, California-based Facebook revealed in an amended form S-1 filing with the U.S. Securities and Exchange Commission on Wednesday that it is offering 180.0 million Class A common shares and the selling shareholders, including Dustin Moskovitz, Accel Partners, Digital Sky Technologies, are now offering about 241.2 million Class A common shares.
The company and the selling stockholders have also now granted the underwriters the right to purchase up to an additional 63.2 million shares of Class A common stock to cover over-allotments.
Previously, the selling shareholders were selling 157.42 million shares and the underwriters were granted the right to buy an additional 50.6 million shares.
In what is expected to be the largest ever IPO for a technology company, Facebook is now seeking a market valuation of more than $100 billion. Chief Executive Officer Mark Zuckerberg was on a roadshow mustering support from investors for the company's offering.
With up to $16 billion in expected proceeds, the IPO is also now touted to be the second-largest IPO ever in the U.S. after Visa, Inc.'s (V) $17.9 billion IPO in 2008, and just above the recent General Motors' $15.8 billion IPO in late 2010.
The IPO pricing puts the social network on track to become the most valuable Internet company in the U.S. at the time of an IPO, exceeding Google Inc.'s (GOOG) $24 billion valuation in 2004. Google had raised about $1.67 billion in the IPO.
Facebook mastermind Zuckerberg will maintain a firm grip on the company even after the IPO, holding or having the ability to now control about 55.8 percent of the voting power of its outstanding capital stock. However, he will now face scrutiny from investors looking for big return on the faith in the profitability of the social network.
The Facebook IPO has been long awaited event since the hugely successful offering from online professional networking site Linkedln Corp. (LNKD) a year ago. 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) and Yahoo, Inc. (YHOO).
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by RTT Staff Writer
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