Facebook sets final price for IPO at US$38 a share
Facebook has set the final price for its IPO Friday at US$38 a share in a flotation that will reap the network between US$16bn and US$18bn. This is likely to value the social network at US$104bn – the biggest valuation of a US company at IPO.
The price comes after hours of meetings between Facebook management and senior bankers. The company will float on Nasdaq using the stock symbol ‘FB’.
Since the dot.com boom of 1999/2000 there hasn’t been this much of a concentration of tech IPOs in such a short period of time, barring Google’s IPO in 2004. In the past year LinkedIn, Zynga, Yelp and Groupon have all gone public.
In a statement Facebook said it is offering 180,000,000 shares of Class A common stock and selling stockholders are offering 241,233,615 shares of Class A common stock.
“Closing of the offering is expected to occur on May 22, 2012, subject to customary closing conditions.
“In addition, Facebook and the selling stockholders have granted the underwriters a 30-day option to purchase up to 63,185,042 additional shares of Class A common stock to cover over-allotments, if any,” Facebook stated.
Trading will kick off at 9.30am New York time. In Facebook’s customary way of bucking the system the trading bell will be rung from Facebook’s San Francisco headquarters rather than Nasdaq’s trading floor following a marathon all night hackathon.
Morgan Stanley, J.P. Morgan, Goldman, Sachs & Co., BofA Merrill Lynch, Barclays, Allen & Company LLC, Citigroup, Credit Suisse and Deutsche Bank Securities are serving as book runners for the offering. RBC Capital Markets and Wells Fargo Securities are serving as active co-managers.
In its filing in February, Facebook revealed it hopes to raise US$5bn in an IPO in early May. Now that stands at between US$16bn and US$17bn.
Its SEC filing, Facebook revealed that in 2011 it achieved revenues of US$3.7bn, up from US$1.9bn a year earlier. It derived a net profit in 2011 of US$1bn, up from US$606m last year. Facebook has total assets of US$6.3bn and liabilities of US$1.4bn.
Employees of Facebook hold 30pc in the company while founder Mark Zuckerberg holds 24pc of the company's stock. Ireland’s own rocker Bono from rock band U2 is is one of the investors in Elevation Partners, a venture capital firm that spent more than €156m for a 1.5pc stake in the social network.
Elevation has seen its stake increase more than sevenfold in just more than two years. The shares are now worth between €1.1bn and €2bn.
Other investors include Digital Sky Technologies (10pc), Accel Partners (8pc), Dustin Moskowitz (6pc), Eduardo Saverin (5pc), Sean Parker (4pc), Goldman Sachs clients (3pc), Microsoft (1.3pc), Peter Thiel (3pc), Greylock Partners (1.4pc), Meritech Capital Partners (1.6pc), Chris Hughes (1pc), Li Ka-shing (0.75pc), Interpublic Group (0.5pc) and Goldman Sachs (0.8pc).