Facebook prices at top of range in landmark IPO

Facebook priced its initial public offering at $38 a share, giving

the world’s No. 1 online social network a $104 billion valuation in

the third largest offering in US history.
The offering gives the eight-year-old company, founded in a

Harvard dorm room and now with 900 million users, a valuation

akin to that of Amazon.com,and exceeding that of

Hewlett-Packard and Dell combined.

Predictions on how much the stock will rise on the first day of

trading vary greatly, with some experts saying anything short of a

50 percent jump would be disappointing. Other IPO watchers

say the large size of the float, coupled with a raised price range,

could reduce first-day gains to as little as 10 percent.

“I think anything over 50 percent will be considered a successful

offering — anything under that would be underwhelming,” said

Jim Krapfel, analyst at Morningstar. “A lot of retail investors are

not concerned about valuation. That’s what is going to drive the

first day pop.”

Lee Simmons, industry specialist at Dun & Bradstreet, had a

more modest forecast.

“You’ve got a large offering at an increased price, so a huge

pop may be difficult to achieve. I’d think a 10 to 20 percent pop

over the offer price is expected,” Simmons said. “When you’re

talking about doubling or a pop the size of LinkedIn, it’s more

difficult to achieve because Facebook is just offering more

shares ... The others were smaller floats, under 10 percent, so

you had this artificial feeding frenzy.”

Shares of professional networking company LinkedIn doubled

on their first day of trading.

On Wednesday, Facebook increased the size of the IPO by

almost 25 percent to 421 million shares, a 15 percent float.

Zynga, an online games developer that makes lots of games for

Facebook users, fizzled in its debut and ended down 5 percent

on its first day of trading. No one Reuters spoke with said they

were expecting a fall in Facebook’s stock on Friday.

Facebook will celebrate its Wall Street debut with an all-night

“hackathon” at its Menlo Park, California, headquarters starting

on Thursday evening, a company tradition in which Facebook’s

computer programmers work on side projects that sometimes

become part of the main product offering.