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Facebook announces initial IPO price range of $28 to $35

Ars Technica
Thursday, 3 May 2012

Facebook is slated to set its price range for its initial public offering (IPO) at $28 to $35, according to an amended filing with the Securities and Exchange Commission (SEC) first reported by the Wall Street Journal on Thursday. The company is expected to be publicly listed on the NASDAQ exchange on May 18 under the ticker symbol “FB.”

"Facebook, Inc. is offering 180,000,000 shares of its Class A common stock and the selling stockholders are offering 157,415,352 shares of Class A common stock," the company wrote in the S-1 filing.

"We will not receive any proceeds from the sale of shares by the selling stockholders. This is our initial public offering and no public market currently exists for our shares of Class A common stock. We anticipate that the initial public offering price will be between $28.00 and $35.00 per share."

However, one WSJ reporter also noted on Twitter that some investors, including Peter Thiel (founder of PayPal and venture capitalist), Microsoft, Greylock (another VC firm), and CEO Mark Zuckerberg himself are already looking to cash in to some degree before the IPO on non-public stock that they had held so far.

At the listed opening price range, the company is expected to raise over $13 billion, and would put its market capitalization, or estimated total worth, in the $77 to $96 billion range, just shy of Amazon’s current value and about twice that of HP’s. But that’s still relatively low compared to the Silicon Valley titans. By comparison, Google’s market cap is at about $200 billion, and Apple is hovering around $540 billion.

The filing also states that CEO Mark Zuckerberg "will hold or have the ability to control approximately 57.3 percent of the voting power of our outstanding capital stock following this offering."

In the S-1 filing, Facebook lists a number of perfunctory "risk factors" associated with the sale of its stock. Among those is: "there are changes in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security, or other factors."

That comment couldn't come at a more opportune time, given Consumer Reports' new study on the social network. It included this gem of a statistic: "25 percent said they falsified information in their profiles to protect their identity, up from 10 percent two years ago."

As the New York Times aptly points out, that is in direct violation of Facebook's terms of service—and with the company's record on privacy not exactly being hiccup-free, privacy will certainly be an area that we all will be watching.

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