Facebook's big day has almost arrived. Pricing of the social media company's initial public offering will be announced this evening, with shares slated to begin trading on the Nasdaq Friday morning. Facebook's IPO could value the company as high as $104 billion — making it the third-largest IPO in U.S. history and the largest IPO of any U.S. Internet company.
Facebook (FB) announced this week it was increasing the number of shares available to the public to 421 million, an increase of 25 percent. The pricing range of its IPO jumped to $34-$38 a share from $28-$35 a share. (Editor's note: Yahoo! Finance to stream LIVE coverage of the Facebook IPO Friday starting at 10:30 am. WATCH IT LIVE HERE!)
Demand from individual investors remains high even as Facebook's early investors are looking to get out. The Wall Street Journal reports venture capitalist Peter Thiel and Goldman Sachs plan to sell as much as 50 percent of their shares, and Accel Partners wants to unload 28 percent of its stake on Friday. Facebook co-founder and CEO Mark Zuckerberg plans to sell up to 6 percent of his stake in the company.
David Kirkpatrick, the author of The Facebook Effect, says he believes Facebook's IPO will be a "massive success" and shrugs off concerns about the company's business model. General Motors' decision to permanently pull its ads off Facebook should not be regarded as a harbinger of Facebook's inability to monetize its users, notes Kirkpatrick.
"GM's decision is not typical of the attitude of advertisers," Kirkpatrick says in an interview with The Daily Ticker. "So far GM is an outlier."
Facebook has acknowledged its difficulty thus far to draw advertising to the site, reporting that first-quarter ad revenue dropped to $872 million from $943 million in the previous quarter. Kirkpatrick says Facebook's business model does not have to rely solely on ads placed on users' pages. The social networking site could distribute ads across the Internet, following the footsteps of other major online advertisers like DoubleClick. Facebook also has the ability to transform its internal currency system into one that could be used to purchase goods, such as a can of Coca-Cola, for instance.
"There are a lot of untapped opportunities" for Facebook, Kirkpatrick says.
Facebook may have been forced to become a publicly traded company because of federal regulations but becoming one does not mean Facebook's original mission will change, Kirkpatrick adds. In the company's S-1 filing, Zuckerberg wrote: "Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected."
Wall Street should not attempt to alter Zuckerberg's vision, according to Kirkpatrick.
Facebook "has grown to 901 million users with him having that attitude," he notes. "It's a very contemporary view of business. He doesn't think business is just there to make money. He thinks businesses really can change the world for the better. A lot of people in the world agree with him."
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