Facebook Sets Price in $104B Flotation

Facebook has priced its shares ahead of one of the most eagerly-anticipated share flotations in recent stock market history.

Facebook's much-anticipated IPO is set for today, where the company will raise US$ 16 billion, leading to a US$ 104 billion valuation. (AP Photo/Paul Sakuma)

The social network said on Thursday that it valued shares at US$ 38 each, and that its shares would begin trading in New York on Friday.

At this price the eight-year-old firm would be worth US$ 104 billion.

Demand is set to be high; earlier this week Facebook said it would be selling 25% more shares than planned.

But questions remain about the firm’s ability to generate profits and take advantage of mobile phone platforms.

There are also concerns that once the company has to answer to shareholders, there may be a greater emphasis on advertising to generate profits.

Limited say

Earlier this week, the company indicated the price would be between US$ 34 – US$ 38 a share, with about 421 million shares up for sale.

This would represent one of the highest value share sales, or initial public offerings (IPOs) in US history.

By selling shares at that value, Facebook raised US$ 16 billion for itself.

However, the new shareholders will not have much of a say in how the company is run.

The shares on offer are A shares, which carry one vote per share, whereas the current owners’ shares are B shares, which carry 10 votes each.

They will control more than 96% of the votes after the public listing, with founder Mark Zuckerberg holding just under 56% of the voting power of the company.

Read more at BBC News.