Facebook Inc., the world’s largest social-networking service could file papers for its initial public offering as early as next week, that could raise as much as $10 billion and value the company at $75 billion to $100 billion according to The Wall Street Journal report.
The WSJ report says Facebook is close to hiring Morgan Stanley to handle the deal.Spokespeople for Facebook, Morgan Stanley and Goldman Sachs declined to comment.
The IPO would provide funds to help Facebook maintain its expansion and withstand the competition from Internet rivals such as Google Inc. and Twitter Inc.
Facebook may set its price at the low end of the valuation range to entice investors and ensure the stock rises after the IPO. Another Social Media company “LinkedIn” went on public last year. LinkedIn priced its shares at $45 and It surged to $80+ at the opening of trading.
And, Facebook has halted the trading in Secondary Market ahead of a filing to make sure that investors can’t exchange shares until all of the information is public.
Facebook is Co-founded by Mark Zuckerberg in 2004 in a Harvard University dorm room, and Facebook got more than 800 million users.
Facebook’s IPO has set up a fierce competition on Wall Street, particularly between the investment banks Morgan Stanley and Goldman Sachs Group Inc. It seems these investment banks are ready to offer their underwriting services for as little as 1 percent of gross proceeds. That would be far less than the 7 percent fee for smaller deals and 2 to 3 percent for other large deals.
Morgan Stanley was the top bookrunner for global high-tech IPOs last year, with $2.2 billion in global proceeds and 10.9 percent market share. It also led the pack in U.S. high-tech IPOs, according to Thomson Reuters data. Goldman Sachs was the runner up with $1.9 billion in global fees and 9.2 percent market share, and ranked No. 3 in U.S. high-tech IPOs behind JPMorgan Chase & Co.
