IPO means ‘Initial Public Offering’ and Facebook IPO means that the social networking giant is getting ready to start trading public stock.
The recent move of Facebook is that they have decided to increase the number of shares to be sold in market debut by 25%. This increment will come solely from the insiders and early investors who have decided to unload more of their shares in the IPO. The news comes public just after a day the company’s decision to raise the stock price ranges from $28-$35 to $34-$38 per share.
The company has confirmed that the increment meant the addition of 84 million shares that worth up to $3.2 billion.
The investment firms DST Global and Tiger Global are the two names that are adding to the major number of shares. Goldman Sachs has opted to double its shares. Though founder Mark Zuckerberg has not entered his name in the list, two members of the Facebook board Peter Thiel and James Brayer are selling more shares too.
No immediate explanation has come from the company over this increase in shares issue. According to the latest document, the number of issued shares will be 421 million instead of previous number of 337 million, and based on the demand the number could be raised to 484 million too.
Facebook is likely to start their Nasdaq trading on Friday, which will be the largest ever internet IPO worth above $100 billion. Mark Zuckerberg is likely to make his debut on the list of top-ten wealthiest Americans even if the company makes a minor first day pop in treading. The COO Sheryl Sandberg will pocket more than $1 billion in paper riches. Another more than billions of bucks are likely to be raked by capital firms from their stock holdings.
This tech bump of the Valley brings a positive impact on the region’s overall economy. California’s creaking economy will be benefitted from the growth of wealth, spending, and generated taxes.
Facebook’s boon for regional businesses is definitely a big deal for the companies and taxpayers of California. The state’s Legislative Analyst Office has estimated that this Facebook hype can add more than extra $2 billion into state treasury by 2013. This additional money is likely to come from personal income taxes due on the compensation based on stock and from cashing in on the IPO.
The company also hints that the home to Facebook’s growing headquarters, the city of Menlo Park, could possibly experience an additional $24 million boost per year from lodging business and retail from the employees of the social networking company.
An analyst of Wedbush Securities Michael Pachter has denoted it to be a giant inflow of wealth into this region from the social networking company and others that follow.