$96B at Facebook value
IPO could raise $11.8b for Internet company
That’s how much the No. 1 social-networking company led by Mark Zuckerberg says it’s worth in its initial public offering.
NEW YORK — Facebook Inc., the world’s most popular social-networking site, is valuing itself at as much as $96 billion US in its initial public offering, the largest on record for an Internet company.
Facebook and its holders plan to sell about 337.4 million shares at $28 to $35 each, according to a regulatory filing Thursday. At the top end of the range, the Menlo Park, Calif.- based company would raise $11.8 billion, compared with the $2.8-billion IPO for German Internet company T-online International AG in 2000.
That would value the company, led by 27-year-old chief executive officer Mark Zuckerberg, at 24 times sales in the 12 months through March 31, compared with five times revenue for rival Google Inc. Facebook’s popularity as a tool for staying connected online will spur demand for the stock, even as some investors steer clear of a valuation they deem too high, said francis Gaskins, president of researcher Ipodesktop.com.
“Some people will buy Facebook stock no matter what — they’ll just buy it,” said Gaskins, who is based in Marina Del Rey, Calif. “There’s going to be an initial push of enthusiasm and money, but ultimately, in a year or so, it will come down to valuation metrics. It has to.”
Facebook has a massed more than 900 million users and reported a 24-fold increase in sales over the past four years. The company was considering an IPO valuation of as high as $100 billion, people with knowledge of the matter have said. At that amount, Facebook would have a market capitalization about half as high as Google’s — even though it has a tenth of the sales.
Facebook is offering 180 million shares, while existing owners such as Accel Partners and Digital Sky Technologies are offering 157.4 million, according to the filing. Zuckerberg is offering 30.2 million of his 533.8 million of shares. The majority of his net proceeds will be used to pay taxes associated with exercising a stock option.
Facebook will have 2.14 billion Class A and B common shares outstanding following the IPO, equal to a value of $75 billion at the top end of the price range. Including restricted stock units, options and common stock to be issued following the purchase of Instagram Inc., the shares outstanding would total 2.74 billion, implying a market value of $96 billion at the high end.
Facebook filed for the IPO on Feb. 1, using a placeholder amount of $5 billion. Zuckerberg, a co-founder, is the company’s top holder, filings show.
Morgan stanley ,jp morgan chase & Co. and Goldman Sachs Group Inc. are leading Facebook’s IPO. The shares will be listed on the Nasdaq Stock Market under the symbol FB.
The initial share sale would dwarf the 2004 IPO of Google, Facebook’s biggest competitor for online ads and the world’s most valuable Internet company. Google’s offering raised $1.9 billion.