Facebook Inc. officially priced its IPO at $38 a share, bringing the value of the company to more than $100 billion in market cap.
The company will file its IPO on the NASDAQ index, and public trading will start at 11 AM EDT, according to NASDAQ. The social networking giant will be publicly listed as “FB” in the index.
Earlier, sources familiar with the matter had told The Wall Street Journal that Facebook executives and senior bankers discussed the pricing at a meeting. Facebook had to file its final price with the Securities & Exchange Commission after market close on Thursday to prepare for the launch on Friday morning.
At $38 per share, Facebook would earn $18.4 billion from the initial IPO and would be the second largest American IPO of all time, behind Visa Inc.’s 2008 offering which was worth $19.65 billion. At a $104 billion value, the company would also have the highest value for any U.S. company at the time of its IPO.
The social networking giant, now head-quartered in Menlo Park, California, started in 2004 in the dorm room of then Harvard undergrad Mark Zuckerberg and his Harvard roommates, some of whom went on to be co-founders of Facebook. By the end of the first year, Facebook had 1 million users, mostly from the U.S., and now reports over 900 million users across the world.
Facebook HQ Hackathon
With Facebook on the verge of taking a major business step by publicly listing its shares on Friday, the Menlo Park, Calif.-based company is also going ahead with its all-night 31st Hackathon on Thursday evening, starting at 7 p.m. The event, posted publicly on Facebook, is reported to have had more than a 1,000 signups from Facebook employees.
The hackathon is part of Facebook’s “hacking” culture, and shows Facebook’s continuous effort to promote product innovation and user experience. “The Hacker Way is an approach to building that involves continuous improvement and iteration,” Facebook Chariman and CEO Mark Zuckerberg explained in a letter to investors included in the company’s prospectus that was filed several months ago. “Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it—often in the face of people who say it’s impossible or are content with the status quo.”
Co-Founder Eduardo Saverin Targeted in Ex-Patriot Act
In closely related news, one of Facebook’s co-founders, Eduardo Saverin, relinquished his United States citizenship a few days ago. His move was criticized harshly by press and lawmakers, who believe that he is relinquishing his citizenship so as to not pay capital gains tax. It is believed that his renouncing the U.S. citizenship would save him $67 million in taxes. Saverin is a permanent resident of Singapore, where he has resided for the past few years.
Defending himself, Eduardo Saverin said in an interview with the New York Times that the move was not for tax purposes and that he considered himself a “global citizen” since he was born in Brazil and traveled around the world before settling in Singapore.
Nevertheless, that didn’t stop two U.S. senators from “disliking” his move. Senator Chuck Schumer and Sen. Bob Casey unveiled the “Ex-Patriot” act, aimed at U.S. citizens who give up their citizenship for the purpose of avoiding taxes, which would tax their future U.S. investments at 30% and barring them from re-entering the United States.