Facebook valued at up to $95B in IPO price range

BARBARA ORTUTAY

AP Tech­nol­ogy Writer

NEW YORK — Face­book, the com­pany that turned the Web social, has set a price range for an ini­tial pub­lic offer­ing of stock that val­ues the com­pany at up to $95 billion.

Facebook’s IPO would be the biggest ever for an Inter­net com­pany. Face­book dis­closed the price range of $28 to $35 per share in a reg­u­la­tory fil­ing Thursday.

At the high end, Face­book and its cur­rent share­hold­ers could raise as much as $13.58 bil­lion. That hap­pens if the under­writ­ers sell extra stock reserved for over­al­lot­ments, which they will likely do given the excite­ment sur­round­ing the IPO.

That’s much higher than the 2004 IPO for cur­rent record-holder Google Inc., which raised $1.9 bil­lion includ­ing the over­al­lot­ment. The IPO val­ued the com­pany at $23 bil­lion. Google is now worth about $200 billion.

Face­book Inc.’s IPO has been highly antic­i­pated, not just because of how much money it will raise but because Face­book itself is so pop­u­lar. The world’s largest online social net­work has more than 900 mil­lion users worldwide.

CEO Mark Zucker­berg, who turns 28 this month, has emerged as a wun­derkind leader who’s led Face­book through unprece­dented growth from its scrappy start as a hang­out for Har­vard students.

Facebook’s offer­ing val­ues the com­pany at $76 bil­lion to $95 bil­lion, based on the expected num­ber of Face­book shares fol­low­ing the IPO. That’s about 2.74 bil­lion, accord­ing to Renais­sance Cap­i­tal, an IPO invest­ment adviser.

Facebook’s next step is to go on an “IPO road show,” where exec­u­tives talk to poten­tial investors about why they should invest in the stock. On Thurs­day, Face­book posted a ver­sion of its road show online, with appear­ances from Zucker­berg; the vice pres­i­dent of prod­uct, Chris Cox; and other executives.

If all goes well, Facebook’s stock is expected to price on May 17 and make its pub­lic debut on May 18.

Zucker­berg will keep tight con­trol over the com­pany even after the IPO. He will con­trol 57.3 per­cent of the company’s vot­ing power, through stocks he owns or because other share­hold­ers have promised to vote his way through shares that they own. This means he will have final say over the biggest deci­sions fac­ing the com­pany even after it goes public.

Zucker­berg will likely own about 31.5 per­cent of Facebook’s out­stand­ing stock after the IPO. At the high end of the expected price range, this will make his hold­ings worth $17.6 bil­lion. This would put him at around No. 33 of the Forbes lists of the world’s rich­est peo­ple, above the likes of Dell Inc. CEO Michael Dell and Microsoft Corp. CEO Steve Ballmer.

Facebook’s expected val­u­a­tion will eas­ily sur­pass well-known cor­po­ra­tions such as Kraft Foods Inc. The amount it is try­ing to raise in the IPO would slot it among the world’s 25 largest IPOs, although as recently as Novem­ber 2010, Gen­eral Motors raised $15.8 bil­lion when it shed major­ity con­trol by the U.S. government.

Among the IPOs that rank higher than Facebook’s, accord­ing to Renais­sance Cap­i­tal, are Visa Inc.’s $17.9 bil­lion IPO in March 2008, the largest for a U.S. com­pany, and world-topper Agri­cul­tural Bank of China Ltd., which raised $19.3 bil­lion in July 2010. These fig­ures do not include extra shares issued to meet demand.

Face­book plans to list its stock on the Nas­daq under the sym­bol “FB.”

Posted by AP News on May 3 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.