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How does Facebook filing $5B for IPO translate to $75-100B in valuation?
10-16-2012, 02:54 AM
Post: #1
Elijah Offline
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How does Facebook filing $5B for IPO translate to $75-100B in valuation?
Where does the remaining $70-95B in valuation come from? Market demand?

For instance, if the IPO were to go through at $100B, (ignoring underwriting commisions/fees etc), does that mean facebook will receive $100B in capital even though they initially filed for $5B?
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10-16-2012, 03:02 AM
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Jerry Offline
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It means that FB is only selling 5% to 7% of the total shares. Insiders like Mark Zuckerberg will continue to own 93% to 95% that will not be immediately available for trading.

The company (and selling shareholders) will receive $5B. However, that establishes the market value for all the shares.
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