Social media giant Facebook has priced its blockbuster IPO at $38 a share, giving the company an astronomical valuation of $104 billion.
At that price, Facebook represents the biggest valuation ever for a US company going public.
The price is at the high end of the $34 to $38 range set by bankers. They had contemplated lifting the price by at least $1 but decided against such a move in the end, sources said.
Facebook’s IPO underwriters, including Morgan Stanley, JPMorgan Chase and Goldman Sachs, were wary of underestimating demand and setting the price too low — leaving money on the table.
The final price comes after the firm increased both the size of its offering, by 25 percent to 421.2 million shares, and boosted its price range to between $34 and $38, up from $28 to $35.
While most IPO shares go to big, institutional investors, Facebook told its underwriters to try and place shares with as many small “retail” investors as possible, sources said.
Facebook raised $16 billion, making it the biggest tech IPO of all time.
Facebook shares will start trading on the Nasdaq tomorrow at 11 a.m. under the ticker “FB.” Shares sold in the IPO represent about 15 percent of the company’s total shares.
Mark Zuckerberg, Facebook’s founder and CEO, who will join the ranks of Silicon Valley’s biggest billionaires, is not expected to ring the bell at the Nasdaq, preferring to celebrate with employees at the eight-year-old company’s Menlo Park, Ca., headquarters.
Instead, Facebook CFO David Ebersman will appear at the exchange, flanked by bank underwriters, including Morgan Stanley’s Michael Grimes and JPMorgan’s Jimmy Lee.