Facebook is already expected to be the largest ever first public offering for an Internet company and its making its IPO even bigger.
Today, The world’s largest online social network increased the planned price range for its stock to $34 and $38 per share with the Securities and Exchange Commission. Previously the price range was $28 to $35. At $38 the sale would raise about $12.8 billion. At a value of $38 per share, the high-end of Facebook’s expected range, Facebook would generate $6.84 billion on its shares. Existing stockholders would collectively make $5.98 billion.
Even at the higher price range, it’s going to be tough for the company’s fans and everyday investors to get in on the IPO. Most of the shares are expected to go to people with connections to the company or those who have large, active accounts with the big banks or brokerage firms directly involved in the stock sale.
The move comes amid growing investor excitement about the offering, which values Facebook as high as $104 billion. Some analysts are comparing the craziness surrounding Facebook’s IPO to Google Inc.’s in 2004.
Facebook still has to be careful not to increase the price too much to make sure the stock still does well when it begins trading on the Nasdaq Stock Market on Friday.
As it stands, Facebook would be the fourth-largest U.S. IPO in history, taking out AT&T Wireless, 2000 IPO raised $10.6 billon.
However, price worries won’t necessarily stop investors. Facebook raised the price range in response to strong demand for its stock, and it’s possible that the stock price could become even higher by Thursday.
CEO Mark Zuckerberg will remain Facebook’s single largest shareholder and he will still control the company through 57 percent of its voting stock. Based on the average high-end of the price range, he’ll get about $1.15 billion from the stock he is selling.
Facebook also adjusted the timetable for finishing its $1 billion buy of Instagram, saying it expects the deal to close sometime in 2012.
Previously, it had said it expected to complete the deal in the second quarter. However, some analysts are speculating that after acquiring the photo sharing network would come under regulatory scrutiny. Furthermore, If the deal doesn’t close by Dec. 10, Facebook could have to pay Instagram a breakup fee of $200 million.
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