May 17, 2012 4:30pm EST – Facebook, Inc. (NASDAQ: FB [pending]) (PrivCo Private Company Ticker: FACEP) priced its initial public offering of Class A Common stock at $38 per share, the high-end of its price range, valuing the social media company at $104 billion, a new record IPO valuation. PrivCo's previous more conservative calculation of shares outstanding valued Facebook at $95.5 billion at $38/share.
Key Facts on Facebook’s Offering:
- The offering will generate $16 billion in proceeds for Facebook.
- At an offering size of $16 billion, Facebook is the second largest U.S. IPO of all time behind Visa’s 2008 offering of $19.65 billion.
- Yesterday, Facebook increased the offering’s volume by 25% to 421.2 million with the new share pool coming entirely from selling shareholders.
- Of the 421.2 million, 241.2 million (57.3% of the offering) shares are being offered by selling shareholders, while the remainder comes from Facebook. (In recent years, only LinkedIn and Pandora's IPOs had a higher percentage of IPO proceeds go to insiders.)
- Facebook shares will begin trading on Friday on the NASDAQ under the symbol "FB". Facebook’s 2-letter symbol is rare on the NASDAQ exchange and demonstrates the exceptions made in order to win Facebook's massive filing.
- Facebook's offering is over-subscribed, and the green shoe over-allotment option of 63.2 million shares is virtually guaranteed to be exercised for a total offering of 484.3 million shares and $18.4 billion in proceeds.
First-Day Stock Pop Likely for FB:
- Facebook stock is expected to see a first-day pop in its price just like peers Yelp, Groupon and Angie's List as the hype and retail investor demand surrounding this offering has been huge.
- However, concerns persist about Facebook’s long-term earnings potential and over-dependence on advertising as a revenue generator. Facebook’s offering prospectus outlined its inability to monetize the growing number of mobile users (54% during March 2012).
- Facebook’s revenues have decelerated in 2012, and PrivCo predicts that Facebook will miss Q2 estimates as well.
- PrivCo maintains a 2012 revenue forecast of $5.37 billion and fair value of $25/share for Facebook.
Selling Shareholders to Cash In on the IPO:
