As expected, Facebook on Thursday priced its initial public offering (IPO) at $38 a share. This gives the social networking giant a valuation of $104 billion, which will make it the largest U.S. company, by market value, at its IPO.
On Wednesday, Facebook increased its IPO size by 25 percent. The social networking giant is thus offering some 421.2 million shares. This means Facebook is raising $16.01 billion when it goes public ($6.84 billion billion for itself and $9.17 billion for investors).
If you include over-allotted shares, meaning a grand total of 484.4 million parts of the company, Facebook could end up raising $18.41 billion. For comparison's sake, Google saw the largest technology IPO when it raised $1.67 billion in August 2004.
Facebook co-founder and CEO Mark Zuckerberg will personally sell 30.2 million shares for the IPO. Despite this, he will still control the majority of the company: 57.3 percent of voting shares after the IPO.
While 180 million of the offered shares will come from the company itself, the remainder will come from investors. Here are the parties that plan to unload part of their stake:
Accel Partners: 49.03 million shares, leaving it with around 152.35 million shares.
DST Group: 45.66 million shares, left with around 85.62 million shares
Goldman Sachs: 28.67 million shares, left with around 37.27 million shares.
Elevation Partners: 4.62 million shares, left with around 35.49 million shares.
Greylock Partners: 7.61 million shares, left with around 29.05 million shares.
Mail.ru Group: 19.60 million shares, left with around 36.75 million shares.
Zynga CEO Mark Pincus: 1.01 million shares, left with around 4.30 million shares.
Meritech Capital Partners: 7.00 million shares, left with around 29.66 million shares.
Microsoft: Offering 6.56 million shares, left with around 26.23 million shares.
Reid Hoffman: 942,000 shares, left with around 3.77 million shares.
Tiger Global Management: 23.41 million shares, left with around 60.43 million shares.
All other parties plan to keep holding their shares. These include T. Rowe Price, Andreessen Horowitz, Sean Parker, and Dustin Moskovitz.
Facebook saw revenues of $1.058 billion in Q1 2012, up from $731 million in Q1 2011 but down from $1.131 billion in Q4 2011. It’s worth noting that revenues also declined between these two quarters a year ago. Facebook typically makes more money in the calendar year’s fourth quarter than in the first quarter.
Facebook saw net income of $205 million in Q1 2012, down from $233 million in Q1 2011 and also down from $302 million during Q4 2011.
Now Facebook is going to have to take its business out into the open.
For reference, here's the full press release from Facebook:
MENLO PARK, Calif., May 17, 2012 -- 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.
In addition, Facebook and the selling stockholders have granted the underwriters a 30-day option to purchase up to 63,185,042 additional shares of Class A common stock to cover over-allotments, if any.
Morgan Stanley, J.P. Morgan, Goldman, Sachs & Co., BofA Merrill Lynch, Barclays, Allen & Company LLC, Citigroup, Credit Suisse and Deutsche Bank Securities are serving as book runners for the offering. RBC Capital Markets and Wells Fargo Securities are serving as active co-managers.
The offering will be made only by means of a prospectus. Copies of the prospectus related to the offering may be obtained from: Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, New York 10014, Attention: Prospectus Department (Tel: +1 866 718 1649; e-mail: email@example.com); J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, (Tel: +1 866 803 9204); or Goldman, Sachs & Co., 200 West Street, New York, NY 10282, Attention: Prospectus Department (Tel: +1 866 471 2526, e-mail: firstname.lastname@example.org).
A registration statement related to these securities has been filed with, and declared effective by, the U.S. Securities and Exchange Commission. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.