Facebook’s Upcoming IPO Cheat Sheet
Facebook’s initial public offering price range sets it on track to being the most valuable American web company at the time of an IPO. The social network’s price range of $28 to $35 a share will value the company between $77 billion to $96 billion, more than Google’s (NASDAQ:GOOG) $23 billion valuation in 2004. It also means that Facebook will start off by beating the current market capitalization of Hewlett-Packard (NYSE:HPQ).
The social network, which will trade its shares on NASDAQ, added that it will try selling 337.4 million shares, which is likely to raise about $13.6 billion. The company is planning to launch a roadshow to talk to potential investors before pricing the stock on May 17, and making the public debut the next day. The offering is being led by Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), and Goldman Sachs (NYSE:GS).
Founder Mark Zuckerberg will own 31.5 percent of the company’s outstanding stock after the IPO, while controlling about 58 percent of its voting power.
Facebook’s IPO has been long awaited largely due to the network’s massive popularity, with the user count close to 900 million. Riding on its success, companies such as Zynga (NASDAQ:ZNGA) have built on the platform to become profitable on their own.
Facebook has been profitable, too, but the company recently reported that sales in the first quarter fell about 6 percent from the last quarter to $1.06 billion, while profit fell 32 percent to $205 million. However, the company also spent big recently, buying Apple (NASDAQ:AAPL) iOS and Google Android photo-sharing app Instagram for $1 billion.