Ever since Facebook announced that it will be going public, investors were speculating on its Initial Public Offering (IPO). It is expected to set a price on Thursday, May 17, 2012. Published reports indicate that Facebook share will be $34 to $38. According to the Securities and Exchange Commission (SEC) regulations, it may not exceed $45 per share. The offering will put Facebook’s market capitalization at $93 – $104 billion and the IPO will generate over $18.4 billion, ranking the offering as the second largest in the U.S. history.
Facebook has two classes of shares. The Class A shares will be the shares that will be offered for trading while Class B shares will be limited to insiders. According to developing stories about the IPO, over 421 million Class A shares will be offered at the IPO. Early investors in Facebook including Goldman Sachs, Accel Partners (a venture capital firm), Tiger Global Management (a hedge fund), Peter Thiel (PayPal co-founder) and companies tied to Russian tycoon Yuri Milner are expected to cash out some of their stocks.
Trading of the stock will start on Friday, May 18, 2012. There will be a 3-6 month “lockup” period for insiders to sell their stock.