Price worries won't necessarily stop would-be investors. Facebook raised the price range in response strong demand for its stock, and it's possible that the stock could price even higher on Thursday.
The Menlo Park, Calif.-based company is offering 337 million shares in its IPO. Of those, 157 million shares aren't coming from the company, but from existing stockholders, including the company's earliest investors and CEO Mark Zuckerberg.
Even after the offering, Zuckerberg will remain Facebook's single largest shareholder. And he will control the company through 57 per cent of its voting stock. Based on the high end of the price range, he'll get about $US1.15 billion from the stock he is selling.
The IPO is is expected to raise more than 10 times as much as the $US1.67 billion raised in Google eight years ago. At a value of $US38 per share, the high end of Facebook's expected range, Facebook would generate $US6.84 billion on its shares. Existing stockholders would collectively make $US5.98 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.
Morgan Stanley leads the team of 33 underwriters selected for the Facebook offering, followed by JPMorgan Chase and Goldman Sachs. The company will trade under the ticker symbol "FB."
Analysts say there's so much interest in Facebook's stock that some underwriters are closing their books as early as Tuesday. This means they won't be taking any more orders from potential buyers.
In its Tuesday filing, Facebook also adjusted the timetable for finishing its $US1 billion acquisition 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.
Some analysts have speculated that the acquisition of the photo-sharing network would come under regulatory scrutiny. If the deal doesn't close by Dec. 10, Facebook could have to pay Instagram a breakup fee of $US200 million.
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