Facebook could be worth more than $100bn as IPO oversubscribed
FACEBOOK’S initial public offering is already oversubscribed, raising expectations that the social network will be worth more than $100bn when it places its shares next week.
The company is seeking to raise $10.6bn at its initial public offfering and has set a target range of $28 to $35 a share, valuing the business at up to $96bn.
However, analysts say Facebook may raise that range because investors want to buy more shares than the 337m the company is making available on Thursday.
The value of the company is expected to surge past the $100bn figure when it starts trading next Friday.
One large institutional investor that had already put in a major order for shares on Wednesday has been trying to acquire more from syndicate desks, according to Reuters.
Facebook began its roadshow to drum up investor enthusiasm on Monday, and appears to have done an effective job, despite concerns over its corporate governance and slow growth in mobile revenues.
On Thursday, Facebook warned investors that the surge of people accessing Facebook on their mobiles or tablet devices was threatening the company’s long-term financial prospects, because it had not yet worked out how to monetise that usage.
It changed its IPO filing with the US Securities and Exchange Commission to warn that, should this trend continue: “Our financial performance and ability to grow revenue would be negatively affected.”
The social network has already gone some way to try to remedy the problem by launching its own app store, but analysts said the ammendment effectively amounted to a profit warning.
Investors and shareholder groups have also raised concerns over Facebook’s dual class shareholding structure, which will allow its 28-year-old founder Mark Zuckerberg to continue running the social network as if it were a private company.