Facebook IPO values it at up to $ 96 b; plans to raise $ 10.6 b

Tuesday, 8 May 2012 00:51 - - {{hitsCtrl.values.hits}}

Reuters: Facebook Inc aims to raise about $ 10.6 billion in Silicon Valley’s largest IPO, dwarfing the coming-out parties of tech companies like Google Inc and granting the world’s largest social network a market value close to Amazon.com’s.

The eight-year-old social network that began as Mark Zuckerberg’s Harvard dorm room project indicated an initial public offering price range of between $28 and $35 a share on Thursday, which would value the company at $ 77 billion to $ 96 billion.

The valuation reflects the company’s growth and bullish expectations about its money-making potential as a hub for everything from advertising to commerce.

“We certainly haven’t ever seen a tech IPO on this grandiose a scale,” said Lise Buyer, a principal with the IPO advisory firm Class V Group.

Facebook stands to raise as much as $ 12 billion at the upper end of its planned range. If an over-allotment or “greenshoe” option is triggered, the company could sweep up a maximum of $ 13.6 billion, according to a Thursday prospectus.

Facebook is only getting about half, or $ 5.6 billion, of the estimated $ 10.6 billion that it would raise at the midpoint of its planned IPO range. About $ 4.9 billon will go to some existing shareholders.

The offering’s price range can be adjusted depending on Wall Street’s response.

Investors are expected to flock to the highly anticipated IPO, though there have been growing concerns about the social network’s longer-term growth and Zuckerberg’s majority control.