Facebook finalised the price of its shares at $38 late yesterday then sold 421.2 million of them at that price, raising $16 billion. This puts the company's worth at $104 billion, the highest-ever valuation of a US company at the time of its IPO.
Trading of the shares begins on NASDAQ on Friday morning under the symbol FB. The Wall Street Journal described the IPO as "a crowning moment for Silicon Valley's latest tech boom."
Facebook had earlier in the week week raised the IPO price range to $34-$38 a share, from $28-$35 a share.
Earlier in the day, Facebook executives and senior bankers had been "holed up in a meeting discussing the price," said the Wall Street Journal , quoting "people familiar with the matter".
The company did try floating higher numbers to investors but was reportedly rebuffed.
At an offering size of $18.4 billion, Facebook is the second-largest U.S. IPO of all time. Only Visa got more in 2008: $19.65 billion. If the Facebook price had got to $41 a share , it would have passed Visa. Facebook is, however, the largest company to go public in the U.S., by market capitalisation
Neither Facebook itself nor co-founder Mark Zuckerberg changed how many shares they were offering but they allowed some major early investors such as Goldman Sachs and Accel to sell more of their shares.
Zuckerberg is selling shares worth up to about $1.2 billion in the IPO. His personal stake afterwards could be worth up to $19.1 billion.
It hasn't all been plain sailing for Facebook. . Last month, the company reported first-quarter sales fell 6% from the fourth quarter to $1.06 billion. Profits were down 32% to $205 million over the same period.
This week General Motors announced it was pulling its paid advertising from Facebook over doubts as to how effective it was, although GM will continue to post (free) content pages.
Still, Facebook is one of the few recent Internet start-ups making public debuts that is profitable, says the WSJ. In 2011, Facebook posted a profit of $1 billion compared to a loss of $56,000 as recently as 2008.
Walter Todd, who oversees about $940 million as chief investment officer of Greenwood Capital, told Bloomberg, “It’ll be a slam dunk when the shares surge on the first day of trading. But I’m not sure that’ll still be true a little further out.”