Facebook IPO Prices Sign of Tech Bubble? More Shares to be Released for Sale
FB IPO Overvalued? Facebook IPO Size Upped By 25 Percent: Company Could Raise As Much As $18 Billion
NEW YORK, NY - According to reports today, Facebook plans to sell 421 million shares in their IPO. That is up around 25% from the 337 million FP stocks previously announced for sale. Additionally, up to 60 million more Facebook shares may be released to cover demand.
At the same time, there are many in the tech and business world who are wondering if Facebook is overvalued and whether it may be a sign of an upcoming Tech Bubble collapse.
Dan Gillmor recently asked readers in the Guardian if the Facebook IPO was the cause for a new dot com bubble to burst what they would invest their money in.
Speaking of the first tech bubble of 1999, he wrote, "a supposedly leaked memo from an internet startup I'd invented to lampoon the craze. The bogus startup was called eTattler.com, which I envisioned as an auction service, run by utterly unethical people, for salacious information about politicians, celebrities and other public figures."
If all Facebook shares are sold at the high end of the price range the company wants, the offering could total more than $18 billion. This would make Facebook one of the largest IPOs ever. This is why many are questioning the value of the company by looking at their revenue - and also the fickle nature of popular social websites. (Remember MySpace?)
Facebook shares are expected to start being available on Friday, although individual investors may have a hard time scooping some up as the institutions who are working with Facebook to sell them will have a chance to buy them first.