Image Credit: Facebook
Facebook IPO on Friday, May 18, 2012 will offer Facebook stock at $38 per share to its clients.
The Facebook IPO will raise $16 billion for the social networking giant and will be the largest technology IPO ever.
A Thomson Reuters rankings indicates that Friday’s Facebook IPO will be the third largest IPO in the US, next to the $19.7 billion Visa IPO (V, Fortune 500) in March 2008 and the $18.1 billion of General Motors (GM, Fortune 500) in November 2010.
There are still a few more steps before Facebook’s shares are ready to trade. The company is waiting for the Securities and Exchange Commission to declare its IPO effective — the formal green light Facebook and its underwriters need before they can sell shares to outside buyers.
The $38 IPO price is the rate at which Facebook’s underwriters (including lead banker Morgan Stanley) will sell shares to their clients, which typically include large institutional investors, mutual funds and hedge funds.
Shares will be released Thursday night to those buyers, who can resell them on the open market beginning on Friday.
Some shares were made available to individual investors, but getting them typically requires either a lot of money or a lot of trading experience. It also required moving fast. Many brokerages offering pieces of Facebook’s IPO allotment “closed their books” on Tuesday, meaning they stopped taking orders.