Are You Ready To Witness The Biggest Tech IPO Ever?

In a few hours, Facebook shares will start trading at $38 placing it at a valuation of $104.12 billion according to a  confirmed release by the company. Facebook and its early shareholders will raise just over $16 billion in  much anticipated IPO.

At  $104 billion valuation, Facebook will be worth more than any other tech IPO candidate at the time of its offering.   Google which was worth $23 billion at the time of its  Dutch auction IPO back in 2004, will be matched and beaten by  Facebook which will be worth about half of what Google is worth now.

The proceeds of the sale are actually split between Facebook and early shareholders like Peter Thiel, DST and Accel Partners. Facebook is only selling 180 million shares while the other stockholders are parting ways with 241,233, 615 shares. On top of that Facebook has given the investment banks underwriting the IPO the 30-day option of selling up to 63,185,042 extra shares. At final pricing, that would be worth $2.4 billion, but it’s likely that Facebook stock will pop a bit tomorrow.

Accel Partners, the first venture firm that backed Facebook, will walk away with $1.9 billion from the sale of its shares. Goldman Sachs will take away $1.1 billion after its late stage investment in the company last year.

Facebook will have the third largest IPO in U.S. history. Only Visa and Italian electric utility ENEL raised more in their IPOs. It’s valuation would also make Facebook worth slightly more than Amazon, which has a $98 billion market cap.

A $104 billion market capitalization puts Facebook at more than 100 times its trailing earnings. That’s a big multiple to live up to, and it will likely need to add bold new revenue streams to justify the mammoth valuation.

Zuckerberg is expected to give a speech or at least a few remarks from Facebook HQ courtyard as preparations for the ceremony are already underway.

Source Techcrunch


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