© 2024
NPR for Northern Colorado
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Facebook Ups Its Forecast: Says Shares Will Sell For $34 To $38

Raul Arboleda
/
AFP/Getty Images

Strong demand for its first public sale of stock has led Facebook to raise its forecast for how much each share will sell for when the company goes public on Friday.

"We anticipate that the initial public offering price will be between $34.00 and $38.00 per share," the company says in a statement filed earlier today with the Securities and Exchange Commission.

Earlier, the social medial giant had expected shares would sell for $28 to $35 each.

As Dow Jones Newswires says, " The Wall Street Journalreported late Monday that the company would raise the price due to overwhelming demand by investors." CNN.com adds that "Facebook executives and the company's IPO underwriters have spent the past two weeks on the road meeting with potential investors and measuring the demand for the company's stock."

About 337 million shares are going on sale. Think you'll be able to get some at the initial price? Well, as The Associated Press reports, "you'll need Facebook friends at very high levels — or a lot of money. Most people who like the idea of owning Facebook's stock will have difficulty getting it at the offer price. ... Unless you know the right people at Facebook, you'll likely need to have a large, active account with one of the big banks or brokerage firms directly involved in the stock sale."

The Wall Street Journal notes that of the 337 million shares, "only a fraction of that amount will go to small investors" because most brokerages have set "steep eligibility requirements" for those seeking to get in on the action. "For example, at Fidelity, clients must have at least $500,000 in their account or have made 36 trades in the past year. Long-tenured clients with the most assets and who trade the most frequently will have preference, says a spokesman."

Copyright 2020 NPR. To see more, visit https://www.npr.org.

Mark Memmott is NPR's supervising senior editor for Standards & Practices. In that role, he's a resource for NPR's journalists – helping them raise the right questions as they do their work and uphold the organization's standards.
Related Content
  • As Facebook prepares to sell stock to the public, perhaps valuing the company at nearly $100 billion, investors will be betting that the firm won't make its users so uncomfortable over privacy that they quit. Meanwhile, Yahoo, another company that also once had a bright future, continues to undergo upheaval as it struggles to define its mission.
  • Third Point, a hedge fund run by Daniel Loeb, has been arguing that Yahoo needs new leadership and may need a new direction. Now, its preferred candidate for the CEO's post is in that position on an interim basis.
  • JPMorgan Chase's $2 billion loss in a risky investment brings attention to the presidential candidates' stances on financial regulation. President Obama supported the Dodd-Frank act, while Mitt Romney has said he would replace it with other regulations.
  • Facebook is expected to start selling stock to the public this week. The social networking giant is expected to begin trading on the Nasdaq Stock Market on Friday. CEO Mark Zuckerberg will remain the company's biggest shareholder. Steven Levy, of Wired magazine, talks to Morning Edition's David Greene about what that means for the company and potential shareholders.