Streams

Facebook Valued at Up to $95B in IPO Price Range

Thursday, May 03, 2012

Facebook CEO Mark Zuckerberg. (Flickr user andrewfeinberg (cc: by-nc-sa))

Facebook, the company that turned the social Web into a cultural and business phenomenon, is worth as much as $95 billion, according to the price range for its upcoming initial public offering of stock.

Facebook's IPO, expected in a couple of weeks, would be the biggest ever for an Internet company. Facebook disclosed the price range of $28 to $35 per share in a regulatory filing Thursday.

At the high end, Facebook and its current shareholders could raise as much as $13.58 billion - far more than the $1.9 billion raised in the 2004 offering for current Internet IPO record-holder Google Inc. The IPO valued the company at $23 billion. Google is now worth about $200 billion.

Facebook Inc.'s IPO has been highly anticipated, not just because of how much money it will raise but because Facebook itself is so popular. The world's largest online social network has more than 900 million users.

CEO Mark Zuckerberg, who turns 28 this month, has emerged as a wunderkind leader who's guided Facebook through unprecedented growth from its scrappy start as an online hangout for Harvard students.

Facebook's offering values the company at $76 billion to $95 billion, based on the expected number of Facebook shares following the IPO. That's about 2.74 billion, according to Renaissance Capital, an IPO investment adviser. The value is set by multiplying the number of shares by the expected stock price.

Facebook's next step is an "IPO road show," where executives talk to potential investors about why they should invest in the stock. On Thursday, Facebook posted a version of its road show online, with appearances from Zuckerberg; Chief Operating Officer Sheryl Sandberg; finance chief David Ebersman and other executives. The company said that putting the road show online was consistent with its focus on "authentic, engaging information."

"We think people's lives will be better and really that the whole world will function better when there is more information and understanding out there," Zuckerberg says in the video, wearing a T-shirt and jeans as he usually does.

One of the most eagerly anticipated IPOs in history, Facebook's was preceded by those from smaller social Web companies such as professional networking service LinkedIn Corp. and online game maker Zynga Inc.

Facebook's stock is expected to price on May 17 and make its public trading debut on May 18. Facebook plans to list its stock on the Nasdaq under the symbol "FB."

The actual price could be higher or lower than Facebook's given range, depending on investor demand. Online reviews site Yelp Inc., for example, set a price range of $12 to $14 and priced at $15 when it went public in March.

If Facebook ultimately prices at its stated maximum of $35 per share, the IPO would raise $11.8 billion. But underwriters are likely to sell extra stock reserved for overallotments, given the excitement surrounding the IPO. That would bring the IPO to $13.58 billion.

The midpoint of the expected deal size, without the overallotments, is $10.63 billion. That would put Facebook just a hair above AT&T Inc., at No. 5, when it comes to the largest-ever U.S. IPOs.

Despite the frenzy surrounding Facebooks offering, not all IPO watchers are impressed. Francis Gaskins president of IPOdesktop.com, said Facebook's growth is "obviously slowing down" based on its most recent earnings report, for the January-March quarter.

While first-quarter revenue grew 45 percent from a year earlier to $1.06 billion, it declined 6 percent from the fourth quarter.

"The company is entering a maturation process," Gaskins said. "I think their core business slowed more than they thought for the past four months."

Zuckerberg, who founded Facebook in his dorm room in 2004, will keep tight control over the company even after the IPO. He will control 57.3 percent of the company's voting power, through stocks he owns or because other shareholders have promised to vote his way through shares that they own. This means he will have final say over the biggest decisions facing the company even after it goes public.

Tags:

More in:

Comments [1]

Kenneth Bennett Lane, Lake Hiawatha, NJ from Richard Wagner Music Drama Institute, Boonton, NJ

SHADY DEALINGS BY COMPANY OFFICIALS AND MAJOR BANKS, SPIN CONTROLLING, AND THE RESPECTED LOSING THAT RESPECT, THAT'S THE RESULT OF THE DUPLICITY AND THE DISILLUSIONMENT THAT SO MANY FEEL ABOUT BEING DUPED !! We live in a world where money may buy the presidency of the USA, where nations observe bestiality and mass killings of innocents, but are afraid that their trade relations might suffer if they intercede. What may yet save still greater calamities is the sophisticated technologies that enable people to reach out to others worldwide to alarm others of all sorts of misconduct. FACEBOOK like YAHOO, will always need to repair their image and to offer what the public requires. WAKE UP AMERICA and salvage our possibilities for artistic growth and recognition. The United Nations delegates and Wall Street CEOs are DAMN GOOD ACTORS, making more compensation for their efforts than they would on Broadway. I am a Wagnerian heldentenor and the director of the Richard Wagner Music Drama Institute, where professional actors are trained for the Shakespeare roles and big-voiced singers are coached in the Wagner roles and voice production and dramaturgy techniques. My next concert in New York will be on Saturday, June 9th at the YOGA EXPO at the New Yorker Hotel . The title of the concert is 'BRING HIM HOME, with that song from the musical LES MISERABLES, encouraging the return of our armed forces and inspiring hope and love of country with This Land is Your Land, The House I Live In, Climb Every Mountain, You'll Never Walk Alone, The Impossible Dream [the Quest], Granada, Wien, Wien, nur du allein, Kumbaya, Billy Bigelow's Soliloquy from Carousel, New York, New Yprk, There's No Business Like Show Business, Empty Chairs at Empty Tables, Do You Hear the People Sing?, When Johnny Comes Marching Home Again, Memory, Music of the Night, Dein ist mein ganzes Herz, Donkey Serenade, and Earth Anthem.

Jun. 01 2012 10:04 AM

Leave a Comment

Email addresses are required but never displayed.

The Morning Brief

Enter your email address and we’ll send you our top 5 stories every day, plus breaking news and weather.

Sponsored

Latest Newscast

 

 

Support

WNYC is supported by the Charles H. Revson Foundation: Because a great city needs an informed and engaged public

Feeds

Supported by