Technology

Facebook Raises IPO By 25 Percent, Could Top $16 Billion

Facebook raises the stake by boosting their highly publicized IPO with 25 percent, says Reuters. This last move could increase Facebook’s value to $16 billion.

The debates about the social network’s ability to make more money after the initial public offering have become more powerful after close sources announced on Tuesday that the company plans to raise the IPO with 25 percent. Even though Zuckerberg estimates that Facebook will be able to top $16 billion, investors are afraid that the company will not be able to produce revenue growth. As a matter of fact, General Motors announced on Tuesday that they were going to pull out of Facebook advertising; thus, causing more concerns.

A close source told Reuters that CEOs plan to add 85 million shares to its IPO gathering a total of 422 million shares for the IPO that is expected on Friday. Analysts think this could be the third-largest public offering that a company has made in the entire U.S. history after the Visa Inc. and GM. They tried to reach Facebook’s spokespersons, but they were not available for comments in relation to the rumor.

Although investors doubt that the IPO could be reflected by the revenue growth of the company, many more people expect Facebook to make the offering. Max Wolff from GreenCrest Capital thinks this is no longer an initial public offering, but rather “a spectacle, a media event and a cultural moment”. Facebook is not concerned that the announcement of General Motors could influence the public’s perception about the offering because the car manufacturer is not representative for all advertisers on the social network.

The price per share ranged between $28 and $35 until Tuesday when Facebook augmented the target price to $34-$38. According to their previous statements, the social network is expected to communicate the price of its shares on Thursday and to begin trading on Nasdaq a day later.

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at Eli.Wads@dailygossip.org

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