Although shares won't start trading for months, the IPO could raise as much as $10 billion and value Facebook at up to $100 billion. Facebook's intentions have been the subject of intense speculation from Wall Street to Silicon Valley this week, after the company's lawyers temporarily suspended trading of its stock on the secondary markets.
Launching as a publicly traded company will propel Facebook up into the top ranks of the largest public companies in the world including Amazon, Bank of America and McDonald's. A $10 billion offering would also put it fourth among U.S.-based companies, falling behind Visa, General Motors and AT&T Wireless. The launch would even dwarf Google's $23 billion market value when it offered an IPO back in 2004 -- the search engine giant is now worth $184 billion.
Although experts don't expect Facebook to trigger the kind of IPO wave that swept Silicon Valley in the late 1990s, Facebook's debut is expected to release a flood of money around the Bay Area, making millionaires of as many as a third of Facebook's roughly 3,000 employees, and billionaires of a few, including founder and CEO Mark Zuckerberg.
an IPO also will mark a major turning point for Facebook, as Zuckerberg for the first time will have to answer Wall Street's profit demands. Zuckerberg has long resisted going public, but as the company has grown, the pressure has mounted from employees, investors and regulators.
Sam Hamadeh, CEO of New York-based PrivCo.com, which tracks financial data on private companies, said in an interview that people close to the deal have told him the Menlo Park
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company plans to offer its shares at a price between $38 and $40 apiece.
That would represent more than a 10 percent premium above where Facebook was recently selling on secondary market SharesPost. Such markets allow people to buy and sell stock in companies that are not yet publicly traded.
Hamadeh was among the first to report that trading of Facebook's stock had been suspended on secondary markets, which he and others had said was a likely sign of an imminent IPO filing.
Facebook plans to list on the New York Stock Exchange, added Hamadeh, and will use the ticker symbol FB. Another person close to the discussions, however, said Friday afternoon that those details have not yet been finalized.
The company declined to comment, as did spokesmen for Morgan Stanley and Goldman Sachs, which Hamadeh said will underwrite the offering.
If the filing comes next week as predicted, it will land almost eight years to the day that Zuckerberg launched the social network in his Harvard dorm room. Facebook now has more than 800 million active users around the world.
Paul Bard, director of research at investment advisory firm Renaissance Capital in Greenwich, Conn., said Facebook's would become the largest Internet IPO ever, far surpassing the marks Google (GOOG) set in its 2004 debut. The Mountain View search giant raised nearly $1.7 billion in its IPO, which established an initial market value of about $23 billion.
But while Bard predicted Facebook will be "a landmark IPO," he said it's unlikely to open the floodgates for the more than 200 other companies that have already filed to go public in the United States. While he expects IPO activity to pick up this year after a moribund second half of 2011, Bard thinks the market will be characterized by "pockets of strong activity,"
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