Facebook IPO could value firm up to $95bn

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Facebook IPO could value firm up to $95bn

Warwick Ashford

Facebook has set the share price for its initial public offering (IPO) this month at $28 to $35 a share, which will value the company at up to $95bn.

The listing on the open stock market is set to realise the highest value to date for an internet firm, far outstripping Google's IPO valuation of more than $23bn in 2004.

Yet the higher valuation falls short of the $100bn that was predicted when Facebook started talking about an IPO in late 2011.

Facebook is set to start promoting its share offering on 7 May, with shares expected to start trading on 18 May and raise $12bn for the company with more than 10% of the business up for sale.

This is more than the $10bn indicated earlier this year and more than double the $5bn initially indicated, but it is in line with analysts' predictions that the figure would change as the company's financial advisors gauged investor demand.

Although some investors have expressed concerns about Facebook's longer-term growth, there is expected to be a huge take-up of the shares on offer, according to the BBC.

The initial IPO registration forms revealed for the first time that Facebook made a profit of $1bn in 2011 from revenues of $3.71bn, and that founder Mark Zuckerberg owns 28.4% of the company.

It is clear Zuckerberg will remain in control of the company after the IPO, controlling more than 57.3% of the voting power through shares and voting agreements with other stockholders.

Zuckerberg will own 31.5% of outstanding stock, which at the top end of the price range, will put his holdings at $17.6bn, and put him at around 33 on Forbes' list of the world's richest people.

Zuckerberg will also overtake Google founders Larry Page and Sergey Brin, who each own shares worth slightly less than $17bn in the search company.


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