Facebook boosts number of IPO shares by 25%
2012-05-16 17:34:56
Facebook on Wednesday boosted by 25 per cent the number of shares for sale at its stock market debut, amid signs of strong investor demand for its initial public offering this week.
The move by the Internet giant comes one day after it filed paperwork with the US Securities and Exchange Commission raising its IPO share price from a range of US$28 to US$35, to between US$34 to US$38 per share. Facebook's IPO is likely to take place on Friday.
The raised IPO share price, as well as the increase in the number of shares available, reflects confidence in stock for the the Menlo Park, California-based company.
Facebook is already assured of becoming the most valuable US Web company at the time of an IPO, topping Google's US$23 billion valuation in 2004.
Trading is expected to begin on Friday under the symbol "FB" on the technology-heavy Nasdaq.
There was no immediate explanation for the increase in shares, which will come from the current holders of shares in prior private offerings. The net proceeds to the company will remain unchanged at $6.4 billion, the filing with regulators said.
The IPO share price gives Facebook a value of $93-104 billion.
Depending on the final value, the IPO would be one of the largest of a US firm on Wall Street, behind the 2008 offering of Visa ($17.8 billion) and General Motors in 2010 ($15.7 billion).
The offering is underwritten by several banks led by Morgan Stanley, JPMorgan Chase and Goldman Sachs.
Based on the estimated market value, Facebook would be in the neighbourhood of Amazon ($100 billion) and Cisco ($90 billion) and ahead of Hewlett-Packard ($45 billion) and struggling Yahoo! ($19 billion).
Some analysts predicted Facebook's stock price will jump quickly to $44 a share and climb much higher in the long term as Facebook finds ways to leverage its membership of 900 million.