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Facebook prices at $38 a share to raise $16B+

This pricing places Facebook's value around $104B as it gets ready to place FB on NASDAQ

Technology trends and news by Krystal Peak
May 17, 2012 | Comments
Short URL: http://vator.tv/n/26d0

Facebook has finally priced its shares in its initial public stock offering at $38 late Thursday. This price point is at the top end of its expected $34-$38 range.

This IPO pricing values Facebook at around $104 billion, the largest-ever for a newly public company. In fact, Facebook is breaking a lot of records with this IPO.

Facebook is also going to be the largest venture-backed IPO on record -- far exceeding the current record holder, Google.  Friday morning the company will debut on NASDAQ under the ticker symbol: FB.

Facebook also breaks the record of most capital raised prior to IPO -- $2.2 billion in equity financing. 

This IPO will generate $16 billion in proceeds for Facebook, only trumped by Visa's IPO in 2008, which generated $19.85 billion.

The Facebook pricing comes just as the Dow Jones industrial average sank 156.06 points, or 1.2%, to 12,442.49 today. 

Across the US tech sector, Apple (AAPL) is now worth around $500 billion, and Google (GOOG) is worth more than $200 billion, and Hewlett-Packard (HPQ), hovers around $43 billion.

So Facebook is looking to catapult right into the top-tier of tech right out of the gate.

The talk of the town's IPO will be the must watch event tomorrow as Mark Zuckerberg rings the NASDAQ bell from the company's Menlo Park headquarters. 

 The financial research firm PrivCo just released its expectations for Facebook tomorrow, stating that the "stock is expected to see a first-day pop in its price just like peers Yelp, Groupon and Angie's List as the hype and retail investor demand surrounding this offering has been huge." But there are still many concerns surrounding the company's long-term earning ability and its mobile advertising. 

PrivCo maintains a 2012 revenue forecast of $5.37 billion and fair value of $25 a share for Facebook. 

The eight-year-old company reported that it earned $1 billion last year, up 65% from the prior year. It also stated in its S-1 filing that revenue climbed 88% to $3.7 billion and is projected to rise 65% to $6.1 billion this year.

Facebook announced yesterday that Goldman Sachs Group Inc. and other inside investors have raised the number of shares they're unloading in the IPO. 

Most analysts are expecting a big pop tomorrow, it is the long-term that is still very questionable, and likely to see some volatility and dips.


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