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Facebook boosting size of IPO by 25%, report says

May 15, 2012|By David Sarno

Facebook Inc. is boosting the size of its initial public stock offering by about 25%, bringing the number of shares that will go on sale to 421 million, according to a report from CNBC.

The social networking giant, which is widely expected to begin selling shares Friday, had earlier planned to make 337.4 million shares available, including 157 million owned by existing shareholders.

In a regulatory filing Tuesday, Facebook said the shares will be priced between $34 and $38, a step up from the $28 to $35 range the company had initially projected. 

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At those prices, the IPO of 421 million shares could raise as much as $15 billion, with more than half of that being earned by Facebook. That price range would also set the total value of the company -- including the many millions of shares that will be kept by Facebook employees and the company's venture capitalists -- above $100 billion.

The boost in the initial share price range and offering size probably indicate the heavy demand by outside investors for an early piece of Facebook. The company chooses the investors and firms to which it will sell the first shares, so individual investors will have to wait to buy them on the open market. The list of firms that will receive first dibs on shares includes several Wall Street finance companies that helped underwrite the deal: Morgan Stanley, JPMorgan Chase, and Goldman Sachs.

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