Facebook is already assured of being one of the most valued companies in the U.S. when it offers its IPO later this month. However, it must convince its investors it is worth the hype that is taking place now.
Facebook’s top executives have taken to the road to kick off what will be one of the most important road shows for Wall Street. The road show will be a marketing drive ahead of the expected IPO of May18. For the company’s small investor a 30-minute tape has been produced that explains the company mission, its products, finances and future. CEO Mark Zuckerberg is the narrator of the video.
Facebook, in their filing with the Securities and Exchange Commission valued their stock price at between $28 and $35 per share. That would value the company at between $70 billion and approximately $87.5 billion. Based on that, Facebook would trail Cisco and Amazon, each that have a value of more than $100 billion, but ahead of Yahoo at $19 billion and Hewlett-Packard at $48 billion.
If every stock option that is available were exercised within the next two years, the value of the company would increase to between $90 and $97 billion, or 26 times the turnover that the company posted in 2011.
In 2004, when Google offered their IPO, it was valued at $23 billion and has a market value currently of $200 billion, just five times its turnover. Some say they are offended by the price Facebook set, others expected it to be higher. Some predicted the share price would be $44 in the short term and much higher over the long term.