We’re just weeks away from the Facebook IPO, and today, the company filed an amended S-1 detailing the price it will seek for its shares.
According to that S-1, Facebook plans to sell some 337m shares at a price between $28 and $35. In this price range, the company will be valued at somewhere between roughly $75bn to $95bn.
At the higher end of its price range, Facebook could raise more than $10bn, cementing its status as the richest tech IPO ever.
That may be sweat music to the ears of Facebook’s CEO, Mark Zuckerberg, who plans to sell approximately $1bn of his stock in the offering, as well as other early Facebook employees and investors. But the valuation Facebook is seeking is less than the $100bn valuation numerous sources had claimed the company would ask for just weeks ago.
That has some of the investors who bought shares of Facebook stock through secondary markets on edge. The Wall Street Journal quotes one such investor, Kevin Landis, who has been accumulating shares of Facebook stock for $31 to $32 per share over the past year, as saying “I’ve been surprised before, but I’ll be surprised again if it ends up pricing at that low end of that range.” His hope is that the lower-than-expected price range will spark more demand for Facebook shares, which could result in an early pop.
Landis’ comments highlight the fact that Facebook’s IPO is really like none other before it. In reality, Facebook is already a publicly-traded company and its IPO is little more than a secondary offering for which members of the general public can get in on the action.
The big question is whether they’ll want to. On one hand, it’s clear that Facebook still has plenty of potential. The most recent evidence of that: frustrated advertisers who want to give the social network more of their money. On the other hand, there are more than a few ominous signs of challenges ahead, such as the company’s quarterly revenue decline and the fact that some social gaming companies are moving their focus to mobile.
At the end of the day, one thing is for sure: Facebook’s IPO will be one for the ages. Whether that means investors who buy in the coming weeks will be smiling six months, a year and five years from now is far less certain.