Print 38 comment(s) - last by overlandpark4m.. on May 22 at 7:08 PM

  (Source: Getty Images/Justin Sullivan)
Company is estimated to be worth around $107B USD, including unexercised share options

Facebook -- the world's most used website and the largest social network in the world -- is on the eve of its initial public offering of stock.

The price of shares -- $38 USD -- was just announced.  That places Facebook's tenative market capitalization at $81B USD, more than some expected.  Combined with executives unexercised share options, the company's total valuation appears to be around $107B USD, according to experts.  That's notably a higher valuation than the world's top online retailer,, Inc. (AMZN) who "only" has a current market cap of $98.4B USD.

The IPO will raise $16B USD, based on the announced share price.  The IPO is the third largest in U.S. history, behind only Visa Inc.'s (V) 2008 offering of $19.7B USD in stock and General Motors, Inc.'s (GM) $18.1B USD post-bankruptcy stock offering.

Shares will trade under the symbol "FB".  It is unlikely that many shares will reach the hands of small independent traders; the IPO is underwritten by finance house Morgan Stanley (MS) and most shares will go to large institutional investors, mutual funds and hedge funds.  This is different from other top tech IPOs of the past, such as Google, Inc. (GOOG) who sold directly to individual investors via a "Dutch auction" process.

The expected offering date is May 18, pending approval by the U.S. Securities and Exchange Commission.

The stock offering is destined to transform Facebook's early investors and founding members into multi-millionaires, if not billionaires.  Facebook's co-founder has reportedly abandoned his U.S. citizenship in order to avoid paying much of the taxes on the windfall that will be coming his way.  Iconic co-founder Mark Zuckerberg remains a U.S. citizen and has pledged to give away his fortune to charity when he dies, as suggested by his mentor, Bill Gates.

Facebook is a company of much controversy and potential.  Some believe it could increase profits by a substantial multiplier if it jumped into the online payments business as a competitor to eBay, Inc.'s (EBAY) Paypal service.  However, concerns over privacy and censorship remain active discussions and may make some investors cautious of diving in to the Facebook stock.

Source: CNN Money

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Comparison with AMZN
By mcnabney on 5/18/2012 3:17:16 PM , Rating: 2
Sprint actually does have no value.

Their cash flow allows them to continue to exist (as do bond purchasers which continue to float the idiotic management, hoping for change). Having no earnings is expected in startups, but is only briefly tolerated in mature companies. If a business isn't currently delivering or have certain to appear profits there is no reason for shareholders to hold their shares and bond holders should brace for a haircut.
Now Facebook doesn't really seem to have much of a plan for future revenue or earnings growth. They do know how to waste money (Instagram) on other companies and ideas that also don't appear to have a ROI.
That is why I rate Facebook as "point and laugh at people scrambling to buy", because it is going to be a hot potato and you don't want to be left holding the Old Maid when everybody darts for the exits when the illusion fades.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

Copyright 2015 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki