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Facebook Sets IPO Price Range Of $28-$35, Valued At About $75 Bln

 May 03, 2012 07:41 PM

(By Mani) Facebook, Inc.  has set a price range for its impending initial public offering in the range of $28 to $35, which would help the social networking giant raise as much as $11.8 billion, valuing the company at around $75 billion.

Facebook increased the IPO size to $13.6 billion from its previous $5 billion and has roughly 2.14 billion outstanding shares. If its IPO prices at the top of the range ($35), the company would be valued at about $75 billion. Earlier, the Wall Street Journal said the initial price is expected to value the company at about $85 billion to $95 billion.

Facebook, founded by Mark Zuckerberg, is the largest internet IPO since Google raised $1.9 billion at a valuation of $23 billion in 2004.

[Related -Facebook Inc (FB) Q4 Earnings Preview: What To Watch?]

In a regulatory filing, California-based Facebook said it would issue about 337.42 million shares, of which 180 million will be Class A shares, while the remaining will be offered by selling stockholders.

Meanwhile, the indicated price range is lower than the $44 price on the private-company exchange SharesPost. At that price, the implied valuation stands at $102.6 billion.

However, the $28 to $35 is only the preliminary range and is subject to change depending on the demand of investors. The company is expected to conduct a roadshow for institutional investors on Monday. The offering is being led by Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM) and Goldman Sachs (NYSE:GS).

[Related -How bank reserves make the gap between deposits and loans disappear]

Within two weeks, Facebook could reveal final pricing and start trading its shares on the Nasdaq Stock Market, under the symbol FB. Upon listing, it would be worth more than technology giant Hewlett-Packard (NYSE:HPQ) and just behind Amazon.com, Inc. (NASDAQ:AMZN).

Facebook is offering two classes of shares – Class A and Class B. The rights of the holders of Class A common stock and Class B common stock are identical, except voting and conversion rights.

Each share of Class A common stock is entitled to one vote, while each share of Class B common stock is entitled to ten votes and is convertible at any time into one share of Class A common stock.

The holders of outstanding shares of Class B common stock will hold about 96.3 percent of the voting power of the outstanding capital stock following this offering.

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