Facebook IPO share prices at $34-$38

Facebook on Tuesday bumped up the price it plans to charge for shares at its stock market debut, giving the leading social network a value that could top $100 billion. Facebook will price its initial public offering (IPO) from $34 to $38 per share, instead of the previously proposed $28 to $35 range, according to paperwork filed early Tuesday with the US Securities and Exchange Commission. The raised IPO share price reflects confidence in demand for Facebook stock and gives the Menlo Park California-based company a value of between $93 and $104 billion. At the higher end of the price range, Facebook could raise nearly $15 billion through the stock sale, with a large chunk of the cash going to its early backers and employees compensated with stock. Facebook is already assured of becoming the most valuable US Web company at the time of an IPO, topping Google's $23 billion valuation in 2004. Trading is expected to begin on Friday under the symbol "FB" on the technology-heavy Nasdaq. Under a dual-class stock structure, Facebook founder and chief executive Mark Zuckerberg, 28, retains 57.3 percent of the voting power of the shares. The company is expected to reap net proceeds of $6.4 billion at $36 per share. The rest of the cash will go to other sellers and cover the costs of offering, including fees and commissions. Depending on the final value, the IPO would be one of the largest of a US firm on Wall Street, behind the 2008 offering of Visa ($17.8 billion) and General Motors in 2010 ($15.7 billion). The offering is underwritten by several banks led by Morgan Stanley, JP Morgan and Goldman Sachs. Based on the estimated market value, Facebook would in the neighborhood with Amazon ($100 billion) and Cisco ($90 billion) and ahead of Hewlett-Packard ($45 billion) and struggling Yahoo! ($19 billion). Some analysts predicted Facebook's stock price will jump quickly to $44 a share and climb much higher in the long term. At the heart of the debate about the wisdom of owning a piece of Facebook is how much revenue it takes in. Revenue vaulted to $1.06 billion in the quarter which ended March 31 -- an improvement year-over-year, but down about six percent from the previous quarter. Eighty-five percent of the total came from ad sales. As one analyst noted, however, Facebook only bills a scant half-percent of the $600 billion spent each year on all kinds of advertising -- even though at least one of every seven minutes spent online around the world is at Facebook. There is wide margin for improvement, seeing as Facebook has more than 900 million users and membership is expanding. The leading social network is unabashedly working to follow members onto smartphones and tablet computers, and the IPO windfall would provide plenty of cash to partner with a hardware maker on a long-rumored "Facebook phone." Morningstar analysts concluded that optimism regarding Facebook's prospects was warranted and considered its popularity on mobile devices "impressive." "Although the company has not actively developed its mobile advertising capabilities, we expect a substantial bulk of mobile advertising dollars to flow to Facebook within the next couple of years," Morningstar said. Recent Facebook moves have included letting people store digital files in the Internet "cloud" and allowing Microsoft to weave social network feedback into results of Bing-powered searches. "We've rarely seen a company borrow from its competition as quickly or as well as Facebook," Forrester analysts Nate Elliott and Melissa Parrish said in a blog post on Monday. "And that focus on better serving end users has seen Facebook grow quickly over the years, even in the face of consistent privacy concerns."