Facebook Stock Prices Revealed

Dennis Faas's picture

Facebook has officially announced its initial public stock offering will go on sale at a price between $28 and $35 a share. At the high end of that range, the company would claim a market capitalization of $95 billion.

Facebook is only selling a portion of its shares. That means the most it could receive in this initial public offering (IPO) would be $13.58 billion, which would make this the ninth-most lucrative stock issue in world history, behind major firms like General Motors and Visa. (Source: ft.com)

Facebook IPO To Claim Internet Record

The $13.58 billion figure would destroy all existing records for IPOs of Internet-related companies.

The current record is held by World Online, which raised more than $2.5 billion in 2000. However, that company's stock price collapsed almost immediately afterwards. Many analysts consider that event the moment the "dot-com" bubble burst.

If the Facebook price holds at $35 per share, the company will leap to a market value just under half of that of Google. Some analysts believe Facebook's stock value will be boosted by over-enthusiastic investors.

While the company is undoubtedly successful, they admit, such a high price isn't justified by Facebook's real-world performance. (Source: sfgate.com)

Stock Pricing Still Subject to Change

Although the $28 to $35 range has been listed in Facebook's latest regulatory filing with the Securities and Exchange Commission, it isn't yet binding on the company.

Analysts believe the final offering price may rise even higher if Facebook senses strong investor demand for its newly issued stock.

Some suggest that Facebook may raise the IPO price a little more just to reach the $100 billion mark.

However, others suggest that Facebook may deliberately under-price its stock a little to help it jump on its first day of open trading, thereby creating a positive impression among investors and the media.

The final decision doesn't have to be made until the day before the stock starts trading, which will be on May 18, 2012.

In the meantime, Facebook's senior managers are embarking on a "road show", visiting major cities across the US to make presentations to and answer questions from potential investors.

The company has also put together a 30 minute promotional video for those who can't attend the roadshow events in person.

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