Facebook Heads For $5bn May IPO

Facebook will issue its initial public offering (IPO) of shares in May, according to reports. The company has called a halt to the small amount of trading currently taking place in privately held Facebook shares.

The IPO, announced in February, had been rumoured for some time. Only a small portion (around five percent) of Facebook will go up for sale, but the $5 billion the company hopes to raise, and the $100 billion (£64 billion)  total valuation, will make this the largest IPO in the history of Silicon Valley.

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Facebook hopes to get the ticker FB, but has not yet announced which exchange it will be traded on, or the actual date of the flotation. With 845 million users, the largest social network in the world wants money to continue to up its game competing against rivals – in particular Google.

Some privately held shares in Facebook are traded on secondary markets, such as Sharespost, where Facebook shares can be bought for $43.50, slightly down from a February price of $46.

It is normal for firms to halt secondary trading of private shares before an IPO, in order to be able to publish a solid list of shareholders, but observers have commented that Facebook is closing the sales down for a very long period.

Facebook’s prospectus still needs to be approved by the US Securities and Exchange Commission, and the company will have to woo large investors, some of whom were critical of the chief executive’s hands-off approach. Mark Zuckerberg was in China this week while the firm held a briefing call with finance firms.

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