Thursday, May 03, 2012

Facebook to price IPO at $28 - $35, company valuation at $96B

Facebook has priced the share price range for its upcoming initial public offering (IPO), according to a filing the company made with the SEC on Thursday. The company will sell its shares at from $28 to $35 dollars, valuing the company at $96 billion and raising as much as $13.6 billion for the social networking giant and its original investors.

MacMall Deal of the Day
At that price, Facebook would become the most valuable U.S. technology company at the time of an IPO. The previous high was Google's 23 billion valuation in 2004. Facebook's value will more than quadruple Google's, and rival those of established technology companies such as ($103.37B), McDonald's ($98.84B) and almost double the value of HP ($48.41B).

Facebook will sell 337.4 million shares. Of that amount, founder and CEO Mark Zuckerberg will sell 30.2 million shares of his own, meaning at the top of the price range we would be seeing Zuckerberg acquire about $1 billion of liquid assets (meaning cold, hard cash).

It's cold hard cash that will be destined mostly for the IRS, according to the filing. The majority of the proceeds from the sale of his 30.2 million shares will be used to pay the huge tax bill associated with the exercise of nearly 60 million shares.

Don't worry, Zuckerberg fans. The Facebook founder and CEO will still have plenty of Facebook stock. In fact, he will still control 57.3 percent of the voting shares post-IPO.

Of the 337.4 million shares, Facebook said it plans to offer 180 million shares of its Class A common stock and that selling shareholders are planning to offer 157.4 million shares. The company will not receive any of the proceeds from selling shareholders.

From the filing, here is a list of other shareholders besides Zuckerberg, and the number of shares they are planning to sell, if any:
  • Accel Partners: 38.2 million shares
  • DST Global: 26.2 million
  • Goldman Sachs: 13.1 million
  • Elevation Partners: 4.6 million
  • Greylock Partners: 6.9 million
  • Group: 11.2 million
  • Zynga’s CEO Mark Pincus: 1 million
  • Meritech Capital: 6.9 million
  • Microsoft: 6.5 million
  • Reid Hoffman: 942,784
  • Sean Parker: None
  • Tiger Global Management: 3.3 million

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