Facebook insiders will be unloading more of their shares in the initial
public offering, the company said Wednesday, as they take advantage of
investor demand.
Facebook said in a regulatory
filing that about 421 million shares will be sold, up from 337 million
under its earlier plans.
The entire increase
comes from insiders and early investors, so the company won't benefit
from the additional sales.
The news comes a day
after Facebook raised the expected price range for the stock to a range
of US$34 to $38 per share, up from its previous range of $28 to $35. Also
Tuesday, major advertiser General Motors Co. said it would stop
advertising on Facebook.
If all the shares being
offered — including more than 63 million more shares that the deal's
underwriters can sell to cover excess demand — are sold at the high end
of the expected price range, the social network's offering could raise
more than $18.4 billion. That would make Facebook one of the biggest
IPOs ever.
The IPO is the most hotly anticipated in years and would value Facebook overall at more than $100 billion.
In a filing with the Securities and Exchange
Commission, Facebook said current shareholders are now offering
approximately 241 million shares, up from about 157 million shares
previously.
The additional stock sales will trim
CEO Mark Zuckerberg's voting control to 55.8 percent from 57.3 percent.
He isn't selling more of his own shares than previously announced, but
has voting control over some of the additional shares to be sold.
Facebook has more than 900 million users who log in at
least once a month, but it makes only a few dollars per year from each
one, chiefly through advertising. Advertisers have been complaining that
it's difficult to make good use of Facebook.
GM
did not say why it would stop advertising on Facebook. The Wall Street
Journal reported, citing people it did not identify, that it was because
GM had concluded that the ads were ineffective.
GM spokesman Greg Martin said the company will keep paid content on
pages that promote its products. Meanwhile, GM competitor Ford
reaffirmed its commitment to Facebook, saying its relationship was
stronger than ever.
Morgan Stanley leads the
team of 33 underwriters selected for the Facebook offering, followed by
JPMorgan Chase and Goldman Sachs.
The offering
is expected to set the final price Thursday evening. Shares would start
trading on the Nasdaq on Friday under the "FB" ticker symbol. (nvn)
