The wait for one of the most eagerly anticipated public debuts in tech history ends tomorrow. Anyone currently biting their nails in anticipation has to be content with the titbits of information coming through from the social network.
The latest nugget to come through is that Facebook has confirmed what it will be pricing its stock at. When it enters the NASDAQ tomorrow, ordinary members of the public will be able to buy shares in the world’s largest social network for US$38, raising US$16-billion.
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The company has twice expanded its share offering in the lead up to the IPO to meet demand.
The 900-million strong social network’s debut is set to eclipse that of Google, which saw the internet giant raise US$1.9-billion back in 2004.
Today, Google is the biggest internet company on the planet and is valued at around US$200-billion — more or less double the US$100-billion Facebook it set to be valued at once it goes public.
The road to IPO has not always been smooth either. Most recently General Motors announced that it would be pulling the US$10-million it spends on Facebook advertising.
While some believed the move would make potential investors jittery, others were more sceptical.
Certainly Facebook is in rude financial health. According to online research company eMarketer (via Bloomberg News) the company put together about US$4-billion in revenue in the 12 months leading up to March 2011. Sales meanwhile are expected to rise to 64% to US$6.1 billion in 2012. That said, the social network did report that its first quarter profit fell to US$205-million amidst a slower market.
Bloomberg also reports that Digital Sky Technologies — which emerging markets internet giant Naspers has a stake in — will sell 45.7-million shares. That means a big payday for two companies with massive presences in emerging markets. In fact, it’s possible that the IPO could indirectly affect China’s Tencent, one of the biggest social players in a country where Facebook is completely banned.
One thing’s for sure though, Silicon Valley is about to be overrun by whole load of new millionaires, and that can only be good for fostering innovation in the global tech Mecca.
Morgan Stanley, J.P. Morgan, Goldman, Sachs & Co., BofA Merrill Lynch, Barclays, Allen & Company LLC, Citigroup, Credit Suisse and Deutsche Bank Securities are serving as book runners for the offering. RBC Capital Markets and Wells Fargo Securities are serving as active co-manage.
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