Facebook unveils IPO price range…Road shows start next week

Facebook Inc. has set a price range of US$28 to US$35 per share for its initial public offering (IPO). The world’s leading social networking company plans to sell 180mn shares in the public offer that is due to hit the markets later this month.

Facebook has also increased the maximum size of its offering to US$13.6bn, up from US$5bn earlier.

The company filed updated IPO papers on Thursday afternoon with the Securities and Exchange Commission (SEC).

Facebook is expected to begin the road show next week and the stock is expected to begin trading on May 18, according to a report in The Wall Street Journal (WSJ). Facebook is planning to list its shares on the Nasdaq Stock Market under the ticker symbol “FB.”

The IPO could take the eight-year-old Facebook’s total market value to ~$75bn. That would put Facebook ahead of PC giant Hewlett-Packard Co. as well as eBay and Yahoo!. Google has a market cap of ~US$200bn while Amazon.com boasts of a market value of a little more than US$100bn.

An additional 157.4mn shares will be sold by Facebook insiders through the IPO. The company will not receive any proceeds from these shares.

Company insiders planning to sell shares in the IPO include Mark Zuckerberg, Facebook’s co-founder and CEO. He plans to sell 30.2mn shares.

Facebook’s other two top officers – Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Ebersman – do not plan to sell shares in the offering, according to the SEC filing.

Other big sellers include venture-capital and private-equity firms, including Accel Partners, DST Global Limited, Elevation Partners and Greylock Partners.

Board members James Breyer of Accel Partners and early Facebook investor Peter Thiel plan to sell 38.2mn and 7.7mn shares, respectively.

Other notable insiders selling shares include Mark Pincus, chief executive of social-game maker Zynga and LinkedIn Chairman Reid Hoffman.

Microsoft will sell ~6.5mn shares – or about 20% of its holdings in the social network.

Facebook had revenue of US$1.06bn in the first quarter, up 45% from the same period last year. Net income fell by 12% during that period to US$205mn, as operating costs nearly doubled. The company has more than 900mn monthly active users.

Nearly a dozen Wall Street firms are participating in the Facebook IPO.

Lead underwriters are Morgan Stanley, JP Morgan and Goldman Sachs.

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