The price of friends: Zuckerberg & Co are asking for $28-$35 for a piece of the social network action.
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Facebook, who are to go public later this month, has just released their asking price for shares in the Internet giant that has revolutionised the Net.
The Wall Street Journal believes the IPO, set to kick off May 18, could coin The Social Network up to $13.6 billion – far higher than the $5-$10bn as previously believed – and push its valuations close to $196 billion mark.
But this is provided the price hits the higher end of the target range (let’s not forget recent forgettable IPOs including Groupon).
If achieved, it would make it the most valued company ever at time of IPO – the largest to date was United parcel $60.2bn, according to the Wall Street Journal, and put Google’s $23 million values in 2004 firmly in the shade.
“We anticipate that the initial public offering price will be between $28.00 and $35.00 per share,” the company confirmed in a regulatory filing.
This asking price means a brazen Facebook is asking investors to cough up 99 times its earnings and “would make Facebook more costly than every member of the S&P 500 relative to earnings except for Amazon.com,” according to Bloomberg research.
It will sell a total of 337.4 million shares and will begin to meet investors next week, Facebook confirmed in a filing Thursday.
So, who’s selling what?
Facebook itself is selling 180 million shares, Zuckerberg is flogging 30m (he owns 533m), while other shareholders including Accel Partners and Digital Sky Technology are also trading another 157.4 million.
But Zuckerberg who could make $US17.6 billion out of the IPO but will still have control over this beloved Facebook:
“Mr. Zuckerberg, who after our initial public offering will control approximately 57.3% of the voting power of our outstanding capital stock, will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors, as well as the overall management and direction of our company,” the filing states.
Because Zuckerberg controls a majority of voting power, the network is classed as a “controlled company” under NASDAQ corporate governance rules, thus will not be not required to have a majority of independent board of directors be nor required to have a compensation committee.
Facebook’s Chief Operating Officer Sheryl Sandberg is not selling any of her 1.9 million stock.
In the filing to US Securities & Exchange Commission, Facebook also boasts of its “vast consumer audience” which is clear with 901 m users and says is “combination of reach, relevance, social context, and engagement gives advertisers enhanced opportunities.. while also creating new ways to generate near-term demand for their products.”