If you want to own some Facebook stock, you’ll have to have at least $28 in the bank. The social network has suggested that shares in its upcoming IPO will be priced in the region of $28 – $35 per share, with the company itself setting a new record for the most valuable US technology company at the time of an IPO.
When the company goes public on the expected May 17 or 18 date, it will be valued up to $96 billion, dwarfing the previous record holder for largest US tech company IPO, Google’s 2004 valuation of $23 billion. The lower end of the price range means a valuation closer to $77 billion, which could actually mean a loss for current investors in the company, although the Wall Street Journal points out that investor interest is more likely to push the figure upwards than the alternative.
Such interest and raised value could mean that the company will raise somewhere in the region of $13.6 billion, comfortably outpacing earlier projections of $10 billion. The only companies to have raised more in an IPO in US history are Visa in 2008 ($19.7 billion) and General Motors in 2010 ($18.1 billion). As part of the 337.4 million shares being sold, founder Mark Zuckerberg is expected to sell 30.2 million and make more than $1 billion as a result, but don’t worry; he’ll retain 57.3 percent of the voting power in the company afterwards.
As part of the run-up to the launch of the IPO, the company’s Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Eberseman are expected to spend just over a week convincing potential investors of the wisdom of buying stock. To support the road show, Zuckerberg will make selected appearances but appears in a video presentation discussing his history with the company. Apparently, some people need more than the company’s dominance in the social media market – The site is expected to hit a billion registered users by the end of the year – as proof that Facebook would be a good investment, when the recent 12 percent drop in Q1 profits when compared with 2011 are factored in. Here’s hoping that’s a really good video, Mr. Zuckerberg; you have $1 billion riding on it.