Facebook, the company that turned the social Web into a cultural and business phenomenon, is worth as much as $95bn, according to the price range for its upcoming initial public offering of stock.
Facebook’s IPO, expected in a couple of weeks, would be the biggest so far for an internet company. Facebook disclosed the price range of $28 to $35 per share in a regulatory filing on Thursday.
At the high end, Facebook and its current shareholders could raise as much as $13.58bn, far more than the $1.9bn raised in the 2004 offering for current Internet IPO record-holder Google Inc.
The IPO valued Google, now worth about $200bn, at $23bn.
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.
CEO Mark Zuckerberg, who turns 28 this month, has emerged as a wunderkind leader who has guided Facebook through unprecedented growth from its scrappy start as an online hangout for Harvard students.
Facebook’s offering values the company at $76bn to $95bn, based on the expected number of Facebook shares following the IPO.
Facebook’s next step is an “IPO road show,” where executives talk to potential investors about why they should invest in the stock.
Facebook’s IPO was preceded by those from smaller social online companies such as professional networking service LinkedIn Corp and online game maker Zynga Inc.
Facebook’s stock is expected to price on May 17 and make its public trading debut on May 18.
Facebook plans to list its stock on the Nasdaq under the symbol “FB.”
Despite the frenzy surrounding Facebook’s offering, not all IPO watchers are impressed.
Francis Gaskins president of IPOdesktop.com, said Facebook’s growth was “obviously slowing down” based on its most recent earnings report, for the January-March quarter.
While first-quarter revenue grew 45 per cent from a year earlier to $1.06 bn, it declined 6 per cent from the fourth quarter.
“The company is entering a maturation process,” Gaskins said. “I think their core business slowed more than they thought for the past four months.”
Zuckerberg, who founded Facebook in his dorm room in 2004, will keep tight control over the company even after the IPO.
He will control 57.3 per cent 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 is offering 30.2m shares in the IPO and plans to use the proceeds to cover taxes.
Other stockholders offering shares include early investors such as James Breyer of the venture capital firm Accel Partners, who’s offering 38.2m shares.
Peter Thiel, a PayPal co-founder-turned venture capitalist who first invested in Facebook in 2004, is offering 7.7m.