Facebook raises IPO prices as offering nears

the IPO, boosted its amount 28 percent to 49 million, and Digital Sky Technologies increased its amount 74 percent to 45,7 million.
“Everybody is cashing out,” said Trung-Tin Nguyen, a hedge-fund manager at TTN AG in Zurich.
“It’s normal for private equities and venture capitals to cash out, but the obvious question is whether they are stretching it too far.”
Facebook, gearing up for the largest-ever IPO of a technology company, had already increased the offering’s price range to US$34 to US$38 apiece, from US$28 to US$35 previously. At US$16 billion, Facebook’s debut would surpass that of General Motors Co to be the second-largest in US history, excluding so-called over-allotments, which let underwriters buy more shares at a later date, data compiled by Bloomberg show.
Goldman Sachs now plans to sell 28,7 million shares, more than double the amount earlier, while Tiger Global Management is selling 23,4 million shares, almost seven times the amount first offered. Facebook’s executives and directors increased the amount of shares they’re selling 62 percent to 189,4 million.
Co-founder Mark Zuckerberg Mark Zuckerberg, the top shareholder, didn’t boost the amount of shares he’s selling. Accel will hold about 23 percent of Facebook’s Class A shares following the offering, compared with about 5,9 percent for Goldman Sachs, according to today’s filing.
Digital Sky will own about 5,4 percent of the Class B shares after the sale, and Tiger Global will hold about 2 percent.
Investors are betting that Chief Executive Officer Zuckerberg can overcome slowing sales growth by expanding into areas such as mobile advertising and e-commerce, said Samuel Schwerin, managing partner at New York-based Millennium Technology Value Partners.
“An increasing number of institutional investors are looking beyond the value of the business today and looking at the future growth,” Schwerin, whose firm oversees US$1 billion, including Facebook stock, said yesterday. “Those drivers are extraordinary in size, including international and mobile and commerce.”
Menlo Park, California-based Facebook and its existing holders had earlier planned to offer 337,4 million shares.
Its underwriters will have the option to buy an additional 63,2 million shares from the company and its holders after the IPO, the company said in the filing yesterday.
GM raised US$15,8 billion in November 2010, before expanding the sale to US$18,1 billion when underwriters exercised the over-allotment option. Visa Inc raised US$17,9 billion in its 2008 IPO, the biggest in the US, and later expanded the sale to US$19,7 billion.
Zuckerberg celebrated his 28th birthday this week, during the final leg of a marketing tour aimed at building demand for the IPO and convincing investors that Facebook can make money from mobile users.
Some institutional investors had balked at buying into Facebook early in the road show over concern about the site’s growth prospects, people with knowledge of the matter said last week. In a Bloomberg Global Poll of more than 1 250 investors, analysts and traders taken before the price range increase, 79 percent said Facebook didn’t deserve such a high valuation.
Facebook’s shares are set to price tomorrow and begin trading under the symbol FB on the Nasdaq Stock Market the following day. — Bloomberg.