Facebook expected to raise the stock by 85 Million more shares to its IPO

In recent developments Facebook is expected to raise the stakes in its initial public offering expected this Friday by 85 million more stock. This increase will bring the total number of stock to a total of 422 million from 337 million.

The reason for this sudden decision in the increment in stock is still unknown so is the final decision on who is going to trade it. So far 180 million shares out of the 337 million will be traded by Facebook and rest by the major underwriters, JP Morgan Chase and the like.

The price range announced last week by the company from $28-$35 a pop has also been raised to $34-$38 a share. At the current price range, given the stock sells at upper notch of the range, it will brings money in Facebook’s account in the tune of $16 billion.

However, for some reason many experts are of the opinion that the IPO might bring an extra of $2 Billion to the company. The vague reason behind such presumption might have something to do with the over-allotment option. The value of the deal would increase by another $1.9 billion if the stock priced at $38 and the company exercised the 50,612,302 share over-allotment option included in the current prospectus; those shares would come from a combination of new shares and selling holders.

In the light of the above, Facebook, according to these experts, is expected to revise the filing at the earliest this week. The company is scheduled to price the shares on Thursday and the official trading will begin on following day.

Facebook IPO is touted as the biggest first public offering in the history of the technology companies, if not the history of trading. For many reasons, many investors are eyeing Friday to purchase the social network’s stock at any given price.

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Posted by Usman Khalid on May 16 2012. Filed under Business, Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.