Facebook IPO seeks to raise US$13.6bn
Facebook has set pricing details for its IPO, paving the way for a mid-May offering.
(Credit: James Martin/CNET)
Facebook is now seeking to raise as much as US$13.6 billion in its IPO, according to an SEC filing today, which would value the company at roughly US$88 billion. The company is aiming to price its shares between US$28 and US$35.
This paves for the way for Facebook and its bankers to begin the road show on Monday, with shares to start trading on 17 or 18 May. While this valuation is lower than the US$100 billion that has often been cited, the price will likely change, depending on the success of the road show. The slightly lower valuation could be due to Facebook's less-than-rosy financial results for its first quarter, which it reported last week.
The valuation cited above is based on data from PrivCo, a firm that digs into private company data. CEO Sam Hamadeh calculated the value using 2.513 billion fully diluted shares outstanding, including options and vested stock grants.
The SEC filing follows weeks of speculation that the IPO might be pushed back to June, because CEO Mark Zuckerberg has been spending a ton of money buying Instagram and a trove of patents from Microsoft, all of which gave the SEC examiners more work to do before signing off on the IPO.
While Facebook's bankers have already been unofficially feeling out demand for the IPO among big money managers, this was just part of the pre-road show dance. Now comes the real thing, where the Wall Street gang travels around with key executives to fill the so-called order book.
The road show, too, has led to much speculation over whether Zuckerberg himself would even participate. Yet, although the road show will lean heavily on the participation of COO Sheryl Sandberg and CFO David Ebersman, Zuckerberg will also play a role.
Zuckerberg took part in a video pitch for investors, which you can see on Facebook's site here.
The New York Times has reported that Facebook executives will meet in New York tomorrow with the sales forces of the company's underwriters to talk through the presentation. They'll then shop the prospectus to prospective investors. The stock will trade under the ticker symbol FB.
Even though Facebook's growth slowed in the last quarter, demand for the IPO is still likely to be high. The bet is that Zuckerberg and team will figure out a way to turn Facebook's unprecedented user base — now more than 900 million strong — into a cash machine. And with so much hype around the IPO, money managers will likely fear missing out.