Facebook has boosted the price range on its initial public offering to seek up to $12.8bn (€10.1bn), signalling chief executive Mark Zuckerberg expects demand for the social network to withstand recent market turmoil.
The new range is $34-$38 a share, a filing shows, implying a market value of as much as $104.2bn.
That would make Facebook, co-founded in 2004 by Zuckerberg, worth more than Citigroup and McDonald’s.
Zuckerberg, whose company has spent more than a week pitching the IPO, raised the range even after the Standard & Poor’s 500 Index this week slumped to the lowest level since February.
That may spell disappointment for investors if the slump persists, said Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp.
“They get more money upfront if they can make it go, but if the enthusiasm is weak out of the gate, it makes it that much more difficult for the company going forward,” he said. “You would think they would be a little more cautious.”
Facebook previously offered the shares at $28-$35 each. At the top end of the new range, Facebook would be valued at 26 times trailing 12-month sales, more than double Google’s valuation when the search-engine operator debuted in 2004.
Facebook topped $4bn in revenue in the 12 months through Mar 31, with more than 900m users. Sales are poised to rise 64% to $6.1bn in 2012, according to eMarketer.
Facebook plans to stop taking orders today for its IPO, two days ahead of schedule, a person with knowledge of the deal said yesterday. The offering of 337.4m shares is oversubscribed
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