Published On: Mon, May 14th, 2012

Facebook could be first U.S. company worth $100 billion at IPO

NEW YORK — Facebook will raise the price of shares for its initial public offering, possibly vaulting the world’s most popular social network to the first $100 billion valuation of a U.S. company at the time of its public debut.

A source told the Mercury News on Monday that Facebook will increase the range of possible prices for the Menlo Park company’s initial shares, raising the maximum price to $38. At that price, Facebook would be valued at more than $104 billion and bring in $12.8 billion. The largest U.S. IPO valuation on record is shipping company UPS at $60 billion, according to Dealogic records.

Facebook is expected to sell 337 million shares to investors Thursday night, after the final price — which could still be higher — is set. After initially saying in Securities and Exchange Commission documents that it expected to charge $28 to $35 per share, Facebook’s new range will be $34 to $38, a person with knowledge of the move said, verifying earlier reports.

The company will receive about 53 percent of the total, before expenses, and the rest will go to existing shareholders such as CEO and cofounder Mark Zuckerberg, who will sell 30.2 million shares to cover taxes on other Facebook stock rewards. After the sale, a total of 2.74 billion shares will be held in Facebook, according to Bloomberg News calculations that include restricted stock units and other shares Facebook does not yet include in its statements.

Both Facebook’s valuation and total take would smash all records for Internet companies. Google (GOOG) holds both records for a U.S. company: The Mountain View search giant took home $1.9 billion at a valuation of $23 billion in 2004. Bloomberg counts German Internet company T-Online’s 2000 take of $2.8 billion as the world record, but Facebook could take in more than four times that much.

Facebook would rank fifth all-time for total amount raised in a U.S. IPO, according to Renaissance Capital; San Francisco-based Visa holds that record at nearly $17.9 billion.

If all goes as expected, Facebook stock would hit the open market Friday morning on the Nasdaq stock exchange under the ticker symbol FB. Zuckerberg will reportedly ring the traditional opening bell from the company’s Peninsula headquarters.

MercuryNews

May 14, 2012

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