Demand-supply mismatch? FB raises IPO range to $34-$38

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By Staff /  15 May 2012 , 12:09

Facebook is likely too refile itsS-1 documentation for IPO tomorrow in response to a strong demand, according to CNBC.The company whose IPO, which is already being subscribed, has raised the price range on its initial public offering to $34 to $38. The market valuation of Facebook somewhere between $92 to $103 billion.

The news was also confirmed by tech website, TechCrunchwhere Josh Constine writes, that

the company’s underwriters will likely exercise their option to sell a “greenshoe” of up to 50.6 million additional shares.Agreenshoe is a SEC-permitted over-allotment optionthat can stabilize a stock’s price by allowing underwriters to sell up to 15 percent more stockthan the company originally planned to sell, but with the option to buy back the stock at the offering price if the actual price drops below this.

At the mid-point of $36, Facebook would raise $12.1 billion by selling 337.4 million shares. The company plans to close the books on its IPO on Tuesday, two days ahead of schedule and in a signal that the landmark initial share sale is drumming up strong demand, a second source familiar with the deal told Reuters earlier.

The social network is scheduled on Thursday to price its shares, then begin trading on Friday.

An investor hold the Facebook prospectus. AFP

Facebook will continue with its roadshow for the rest of the week, said a third source familiar with the deal, and investors who haven’t yet attended a roadshow presentation will still be able to place orders.

Company executives met with prospective investors in Chicago on Monday and are slated to travel to Kansas City and Denver, before returning to Menlo Park, California, where Facebook is headquartered.

A host of Wall Street banks are underwriting Facebook’s offering, with Morgan Stanley, JPMorgan and Goldman Sachs serving as leads. Facebook will trade on Nasdaq under the symbol FB.

With inputs from Reuters


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