All aboard the Facebook IPO train
Market reports suggest Facebook has raised the price range on its initial public offering (IPO) in response to high demand from investors, ahead of its first day of trading on Friday.
According to Reuters, sources close to the matter say the pricing will now be between $34 and $38 per share, which will give the social network a valuation of over $100 billion. Facebook originally targeted a range of $28 to $35 a share. The company is also said to be likely to sell an additional 50 million shares as part of an over-allotment option.
Reports attribute the price hike to overwhelming demand from investors. The IPO is set to be the largest in Silicon Valley's history. Bloomberg has also reported that Facebook will stop taking orders for shares by close of business today (15 May).
Sources also say the IPO is already “well oversubscribed” and further reports have emerged stating Facebook may be looking to sell an additional 50 million shares as part of an over-allotment option called a "greenshoe".
Facebook shares will be listed on Nasdaq under the symbol FB. Pricing is expected to be confirmed on Thursday, and Facebook CEO and founder Mark Zuckerberg will ring the Nasdaq bell (which will actually be a buzzer in this case) remotely from Facebook's Menlo Park headquarters. The ceremony will be live-streamed on nasdaq.com.
Piece of the pie
[EMBEDDED]However, it's not only Wall Street investors wanting to get in on the world's largest social network's entrance into the public market.
According to a CNNMoney report, there is a massive demand from people who do not have the budget for a major investment to purchase a single share and get a commemorative stock certificate. While the general trend has been for companies to no longer issue paper shares, Facebook has reportedly confirmed (in its latest IPO paperwork) that it will issue certificates to buyers.
Online services such as GiveAShare and OneShare aim to cater for the fans of the brand who aren't looking to invest their life savings. Both sites will begin offering Facebook shares as soon as the stock starts trading. Buying a single share via such services will, however, also include a service fee (roughly $39).
The CNN report quotes founder of GiveAShare Rick Roman: “It interests people who are not ordinarily interested in the stock market. We've been getting people asking about it for a year. We think of ourselves as selling a product, not a stock. If the current share price is a few dollars higher than ours, we'll eat the difference.”
Facebook currently has over 900 million active users worldwide, and is expected to exceed the billion user mark before year-end. Despite its growth, a key concern for investors remains the social network's capacity to generate revenue from its growing number of mobile users.
Facebook remains head and shoulders above its competitors in the social networking space. Twitter currently has over 500 million users, while Google+ and LinkedIn both have over 100 million users (data is unclear on active users).