Facebook prices shares in $100 billion flotation

Published:  18 May at 6 PM

As reported by the BBC, social network giant Facebook has valued share prices for its highly-anticipated share flotation. The company announced on Thursday that it had priced shares at $38 each, and would begin trading them in New York on Friday.

At this value, the eight-year-old company will be worth $104 billion. Demand is expected to be high, and earlier this week the firm said it would prepare to sell 25 percent more shares than initially planned.

However, questions remain over the company’s ability to produce profits and make the most of mobile phone platforms. Many are concerned that there may be a stronger emphasis placed on advertising to make profits once the firm starts answering to stakeholders.

Earlier in the week, the firm indicated that the value would be $34-$38 per share, with around 421 million stakes up for sale. This would constitute one of the most expensive share sales, or initial public offerings (IPOs) in American history.

In selling shares at this price, Facebook is raising $16 billion for itself. But the new stakeholders will not be given much of a say in the way the company is run.

Shareholders are given A shares, which offer one vote for each share, while the current owners' stakes are B shares, which offer 10 votes each.