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This is a considerable increate from the originally quoted range of $28 - $35, but in keeping with previous speculation by iTWire, where this writer said, "In my opinion, the shares will finally be priced at around $40, giving the company an initial valuation of almost $110B. Due to the pent-up demand from (in my opinion, irrational) small investors, the price will be pushed up as high as $55 in launch-day trading."
This IPO is the classic case of public demand for shares ignoring the underlying financials. As one commentator noted this is all about the fear of not wanting to miss the next 'google,' where the stock listed at $85 and currently trades around $600.
Unfortunately, Facebook won't be another Google (or Apple!); the underlying financials are exceedingly weak, advertisers are saying the platform doesn't work for them and revenue is declining.
The price announcement states: "Facebook (NASDAQ: FB) today announced the pricing of its initial public offering of 421,233,615 shares of its common stock at a price to the public of $38 per share. The shares are expected to begin trading on the NASDAQ Global Select Market on May 18, 2012, under the symbol "FB." Facebook is offering 180,000,000 shares of Class A common stock and selling stockholders are offering 241,233,615 shares of Class A common stock. Closing of the offering is expected to occur on May 22, 2012, subject to customary closing conditions."
