Facebook set for monster flotation

Facebook on a smartphoneFacebook is heading for one of the biggest-ever US stock flotations when it sells hundreds of millions of shares to the public.

The social networking site is expected to launch its initial public offering (IPO) on the Nasdaq Stock Market on Friday, raising a projected 16 billion dollars (£10 billion) or more.
With the anticipated price of the stock raised to a range of 34 to 38 dollars per share (£21-£23), it is set to be the third largest US IPO in history, ahead of General Motors in 2010, according to Renaissance Capital.

It is also the most eagerly-awaited IPO in years and would value Facebook overall at more than 100 billion dollars (£62.6 billion).

Trading is set to begin under the ticker symbol "FB" two days after massive interest in the sale prompted the company to boost the number of shares it plans to sell, with 84 million more - worth up to 3.2 billion dollars (£2 billion) - being added to the IPO. But the entire increase comes from insiders and early investors, so the company will not benefit from the additional sales.

Facebook board members Peter Thiel and James Breyer are among those selling more shares, but founder Mark Zuckerberg is not increasing the number he is selling.

In a filing with the Securities and Exchange Commission, Facebook said current shareholders are now offering approximately 241 million shares, up from about 157 million shares previously. Investors such as U2 frontman Bono stand to make huge sums, with music magazine NME predicting the singer will become the richest rock star on the planet when the company floats.

Despite the hype, scepticism remains in some quarters, with murmurings that the stock is overvalued. In a recent Bloomberg survey of 1,250 global investors, analysts and traders, 79% said Facebook's valuation was not justified, with only 7% deeming the valuation fair.

Facebook's mobile phone platform is thought to need improvement while its effectiveness as an advertising space has also been debated. These doubts were brought into sharp focus on Tuesday when General Motors, the US's largest car manufacturer, said it would stop advertising on the site.

Facebook has more than 900 million users who log in at least once a month but it makes only a few dollars per year from each one, chiefly through advertising.

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