Cloud Computing: Facebook IPO Likely at $38 a Share According to WSJ
May 17, 2012
Facebook decision makers and their bankers were reportedly closeted together shortly before the markets closed in New York Thursday trying to decide whether to price Facebook’s IPO at $38 or $39 a share, according to the Wall Street Journal, which evidently had a glass – in the way of a source – pressed to the conference room door.
Although nothing is definite yet, evidently the $39 price might break the camel’s back. They reportedly tried it on investors and got told no.
At $38 Facebook would be valued at a record $104 billion for an IPO and raise $18.4 billion. It would take $41 a share for the social networking site to best Visa’s record-setting IPO in 2008. Of course Visa had a proven business model. Facebook doesn’t…
Facebook won’t actually set the price until after the stock markets close and it files papers with the SEC.
Actually the IPO price isn’t even really interesting anymore. Either one has shares or one doesn’t. The numbers to watch is what it opens at Friday and then what it closes at.
Initially Facebook was supposed to price at $28-$35 a share then went ever so predictably to $34-$38 and upped the number of shares on offer by 25% so early investors like Goldman Sachs could cash out.
Founder Mark Zuckerberg, just turned 28 this week, is selling about $1.2 billion worth of stock and should be worth at least $19.1 billion this time Friday.
All he’s got to do is prevent Facebook sales and earnings from falling again sequentially like they did in Q1. The company made $1 billion on $3.7 billion in sales last year. It is now supposed to have 901 million users worldwide who may have to sacrifice their personal data to Facebook’s monetization.
Facebook has fetched $44 a share on the so-called secondary markets before further trades were halted.