Facebook sets IPO range: Social networking giant to be valued at more than $75 billion

Facebook is getting one step closer to becoming a publicly-traded company, with the social networking powerhouse today disclosing in a SEC filing that it intends to sell shares in the price range of $28 to $35 per share. The deal would value the company between $77 billion and $96 billion, with CEO Mark Zuckerberg’s stake coming in at $18.7 billion, according to The Wall Street Journal.

That’s just shy of Amazon.com’s stock value, which as of Thursday afternoon stood at $103 billion. The stock could generate as much as $13 billion for the company.

The IPO is one of the most highly-anticipated offerings of the year. Facebook now has more than 900 million active users, a 33 percent increase over the same period last year.

Microsoft remains a small shareholder in Facebook, dating back to a $240 million investment it made in the company five years ago that gave it a 1.7 percent stake. Facebook also recently agreed to purchase 615 patents from Microsoft for $550 million, part of a portfolio that Microsoft acquired from AOL last month for $1 billion.

Nonetheless, despite that cozy relationship, Facebook still lists Microsoft as a potential competitor in its SEC filing.

“We face significant competition in almost every aspect of our business, including from companies such as Google, Microsoft, and Twitter, which offer a variety of Internet products, services, content, and online advertising offerings, as well as from mobile companies and smaller Internet companies that offer products and services that may compete with specific Facebook features,” the company wrote in its filing.

Facebook also just opened a new office in Seattle with room for as many as 170 employees. It had a total of 3,539 employees at the end of March.

  • Guest

    Congratulations to Facebook on this filing! I think we can all remember Google’s IPO which priced shares at only $85 — by the end of day one, the company had soared even higher than the most optimistic pundits had expected. Imagine if you could own a piece of Google for so little!

    I do not own Facebook shares, but I think someday we’ll look back nostalgically to a point on our cultural timeline at which one could own a piece of Facebook for $28.

  • Guest

    They’ll easily exceed that $35 valuation on their first day trading.

  • Guest2

    Despite the $100B/valuation hype (for the past 3 months), the notion they’d price lower at IPO makes sense.  Even if they could hit $100B on day-one, by day two or three, they’d be below that mark and we’d keep watching them see-saw between above/below that Magical Number for a year.  It would be tiresome.

    This way, they have room to grow; without the pundits tracking “are they over/under” some magical even number.  No one cares if they’re at $85B one day and $82B the next.  It’s not news.

    Regardless, even a $75B valuation is nearly a 75x P/E ratio, which is ridiculous (15-20x would be comparable to legitimate businesses).  The ecosystem that hangs onto Facebook at an inflated valuation is ripe to crash and burn.

    • Guest

      Amazon has a PE of nearly 185. It’s had a PE above 100 for several years now. It may not be long term sustainable, but as the saying goes “the market can stay irrational longer than you can stay solvent”. FB is the pure play in social. That, combined with their growth, will likely see the stock do well not only at IPO, but for several years afterwards. I’d expect a move similar to what Google experienced. Then whether it flattens out like Google or not will depend on whether FB can figure out how to be more than a one trick pony.