Facebook is likely preparing to increase its starting price for shares of Facebook stock. The previously announced price range was $28 to $35; new reports are pegging the starting price range between $35 and $40.
UPDATE 6:45pm Pacific: The Wall Street Journal reports that Facebook in fact raised its target price to $34 to $38 per share late today, putting the company’s valuation at $93 billion to $104 billion.
CNN Money reporter Maureen Farrell writes that the social network’s cadre of underwriters for the deal are slated to bump up the price range as soon as tomorrow.
Sponsored by VB
At its earlier range, the Facebook IPO could have raised up to $11.88 billion. At $40 per share, Facebook stands to raise $13.5 billion.
In private trading on secondary markets, Facebook shares sold just last month for around $44 each shortly before the company halted private trades in preparation for its IPO.
Facebook stock is likely to enjoy a quick growth spurt in share price, especially in the first few days and months of trading. Analysts have compared this initial public offering to Google’s in 2004. Google’s share price started at $85 and currently sits at around $600, with the company recently announcing a stock split.
However, newer tech IPOs can also be more vulnerable to volatility in the general market, as we’ve seen recently with Groupon and LinkedIn stock during March’s downturn.
We recently went around the VentureBeat office and asked everyone, from execs to reporters, what they thought a fair price for the shares would be; here’s their analysis.
VB’s research team is studying mobile user acquisition... Chime in here, and we’ll share the results.