Photo: Internet Marketing Grind
As Facebook goes public, investors eagerly await news of the price of Facebook IPO, which has increased according to its latest filing with the Securities and Exchange Commission (SEC). However, some Americans are not as excited about the prospect of investing into the company, calling its popularity a passing fad.
Facebook IPO Increases
Early Tuesday, investors learned that the Facebook IPO range increased since the company’s last announcement a few weeks ago. Facebook set the target price range for its stock at $34 to $38 each share, which is a significant hike from the share price range set earlier this month of $28 to $35, according to the SEC filing.
The decision to increase its stock price came after Facebook executives and the company’s IPO underwriters spent two weeks on the road meeting with potential investors and measuring demand for the company’s stock. After the executives finished their tour, they determined that stock demand is higher than originally anticipated.
If the company prices its IPO at the high end of its new proposed range, its valuation could hover around $81.2 billion, which would make it the biggest internet IPO ever.
Facebook Skeptics Call Website a Passing Fad
While many investors are eager to jump on the company when Facebook goes public, some Americans don’t plan to purchase shares. According to a new Associated Press-CNBC poll, not only do 50 percent of Americans believe that the company has priced the stocks too high, they think the company is among the many internet fads that will eventually lose steam.
Also, 58 percent of respondents say those who invest in the stock market are more likely to see the new Facebook IPO price range as overvalued. Overall, 40 percent of respondents say Facebook would not be a good investment.
But experts say a large number of investors are more than willing to get in on Facebook’s action, fad or not. As a result, the company could push for an even higher IPO when it sets its final price.
Once the final IPO price is set, which many anticipate will occur on Thursday evening, Facebook underwriters will begin selling shares to mutual funds, hedge funds, large institutional investors and other clients. Then on Friday morning, individual investors will gain access to the shares on the Nasdaq exchange.