Facebook prices IPO at $US38 per share

18 May 2012, 7:15 am   -   Source: AAP

Facebook has announced it will sell its shares for $US38, which values the world's largest online social network at more than $US100 billion.

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Facebook has priced its initial public offering of stock at $US38 per share, at the high end of its expected range.

It means investor demand is strong for the world's largest online social network.

Facebook Inc and its early investors now stand to reap as much as $US18.4 billion ($A18.6 billion) from the IPO, if the extra shares reserved to cover additional demand are sold as part of the transaction.

The IPO values the company at about $US104 billion, above Amazon, Disney and Kraft.

Facebook's stock is expected to begin trading on the Nasdaq Stock Market sometime on Friday (Saturday AEST) under the ticker symbol FB.

Facebook is the third-highest valued company to ever go public, according to data from Dealogic, a financial data provider. Only the two Chinese banks have been worth more.

For the Harvard dorm-born social network that reimagined how people communicate online, the stock sale means more money to operate the data centres that hold the trove of status updates, photos and videos shared by Facebook's 900 million users.

It means more money to hire the best engineers to work at its sprawling Menlo Park, California headquarters, or in New York City, where it opened an engineering office last year.

And it means early investors, who took a chance seeding the young social network with start-up funds six, seven and eight years ago, can reap big rewards.

Peter Thiel, the venture capitalist who sits on Facebook's board of directors, invested $US500,000 in the company back in 2004. He's selling nearly 17 million of his shares in the IPO, which means he'll get some $US640 million.

CEO Mark Zuckerberg, who just turned 28 on Monday, has emerged as the latest in a lineage of Silicon Valley prodigies who are alternately hailed for pushing the world in new directions and reviled for overstepping their bounds.

He's counted the late Apple CEO Steve Jobs among his mentors and he became one of the world's youngest billionaires - at least on paper - well before Facebook went public.

Though Zuckerberg is selling about 30 million shares, he will remain Facebook's largest shareholder. He set up two classes of Facebook stock, building on the model Google co-founders Larry Page and Sergey Brin created as part of the online search leader's 2004 IPO.

The dual class structure helps to ensure that he and other executives keep control as the sometimes conflicting demands of Wall Street exert new pressures on the company.

As a result, with the help of early investors who've promised to vote their stock his way, Zuckerberg will have the final say on how nearly 56 per cent of Facebook's stock votes.

True to form, Zuckerberg and Facebook's engineers are ringing in the IPO on their own terms.

The company is holding an overnight "hackathon", where engineers stay up writing programming code to come up with new features for the site.

Then Zuckerberg will ring the Nasdaq opening bell from Facebook's headquarters.

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