Thursday, May 03, 2012

Urgent: Facebook sets IPO valuation at $86 billion

[Updated at 3:57 p.m. ET with more details.]

Facebook has just set the estimated price for its initial public offering at $28 to $35 a share, according to a revised prospectus released moments ago.

At the midpoint of the range, the social networking company is on track to raise $10.6 billion, in a debut that could value the company at $86 billion, The New York Times is now reporting.

My earlier post: The valuation is based on an initial public offering price in the high-$20s to mid-$30s a share, according to a story just posted by The Wall Street Journal, which is citing people familiar with the matter.

The NYT has now posted its own account. Facebook's revised IPO prospectus, due after the market closes in about 20 minutes, is also likely to reveal the offering's potential size, the NYT says, citing sources it, too, doesn't identify.

Facebook is looking to sell a little more than 10% of its shares, so could raise $10 billion in the IPO, the Times says.

The pricing puts Facebook on track to become the most valuable U.S. Web company at the time of an IPO, exceeding Google's $23 billion valuation in 2004, the Journal says.

Based on its current stock price, Gannett's market value is $3.3 billion, according to Google Finance.

Two weeks, and counting
Facebook's offering is one of the mostly closely watched of a new generation of social media companies because of its meteoric growth since CEO Mark Zuckerberg, 27, co-founded it eight years ago. Facebook now claims more than 900 million users.

The final IPO share price will be set two weeks from today, with trading beginning the following morning, the WSJ says.

Facebook is profitable. "But the company recently disclosed that its profit and sales dipped in the first quarter of this year, compared to the prior period," the paper says.

Sales in the period fell 6% from the fourth quarter to $1.06 billion, while profit slumped 32% to $205 million.

Last year, Facebook posted an annual profit of $1 billion and $3.7 billion in sales, compared to a loss of $56,000 and $272 million in sales as recently as 2008.

[Image: Zuckerberg was Time's person of the year in December 2010]


  1. Heard it'll be $31.50.
    Shares won't be shortable until the lockup period expires, which is usually about a month.

    Gannett shares are shortable on any given day.

  2. What about our account, Jim. Could you link ?

  3. 11:42 I think you must mean USA Today's, which is here.


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