Facebook IPO Expected to Hit NYSE as "FB"

Facebook is expected to launch on the New York Stock Exchange with the ticker symbol "FB," and for now, its bankers are expecting the social-networking behemoth to carry a valuation of $90 billion to $95 billion, according to a report from PrivCo.

IPO enthusiasts and investors have been frothing at the mouth for months, even years, over a potential Facebook IPO. And according to a report by The Wall Street Journal on Friday, it appears Facebook may file its IPO as early as Wednesday.

Lending even greater credence to the WSJ report was a PrivCo report and Bloomberg article earlier in the week that said trading in Facebook shares on the secondary markets were halted on Jan. 25 and would remain shut down through at least Jan. 27. PrivCo, which supplies financial data on privately held companies, noted that secondary trading is often halted ahead of a company's IPO filing.

Facebook's secondary-market investors include folks like Facebook employees, former employees, and private investors. They are allowed to trade their shares on the secondary market even though Facebook has not launched its IPO.

PrivCo says it's hearing that Facebook's initial pricing range will be $38 to $40 a share and that the company wants to keep its valuation just under $100 billion, says Sam Hamadeh, PrivCo CEO.

By pricing the IPO a little cheaper than what investors may be willing to pay, the goal is to provide a little "pop" to the stock once it begins trading, Hamadeh explained.

Meanwhile, Facebook is eyeing the New York Stock Exchange to launch its IPO, in part because it believes it is mature enough as a company based on its revenues and profits to run with the blue-blood blue chips, Hamadeh says. He also notes tjat PrivCo has heard Facebook's ticker will be a coveted two-letter ticker -- "FB."

"A one-letter ticker is reserved for the bluest of the blue chips. But Ford already had "F," Hamadeh said. "A four-digit ticker is the least coveted."

Facebook's IPO debut is likely to outshine that of other recent IPOs, like, hmmm, Groupon's (Nasdaq: GRPN  ) four-letter ticker listing, GRPN. Since its market debut in November, Groupon has seen its shares sink below their $20 IPO price. Ouch. But optimism around Facebook could lift all boats in the social-media space. Groupon popped 2.6% on Friday after reports of a Facebook listing filtered out, while LinkedIn (NYSE: LNKD  ) jumped a whopping 5.9% in late trading.

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Fool contributor Dawn Kawamoto owns no shares in the companies listed. The Motley Fool owns shares of LinkedIn and Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On January 31, 2012, at 12:03 AM, MHedgeFundTrader wrote:

    The street is chattering today over the prospect of an enormous payday with the imminent IPO for the social media company, Facebook. Price talk is valuing the company as high as $100 billion, making it the largest such floatation in history. Could the mega deal spell the end of the current bull market?

    Look at it this way. That is $100 billion that gets sucked out of the market. It is $100 billion that gets diverted away from existing equity allocations. Many investors will need to sell existing positions in other companies to pay for their new Facebook shares, especially in the technology sector.

    Can the market afford to lose $100 billion in buying power in its current fragile condition? I think not. Take a look at the chart below which has the (SPY) making a near parabolic move since the beginning of the year. At the very least, we need to pull back to just above $126, which takes us down to 1,256 on the S&P 500, smack dab on the 200 day moving average. If you don’t believe me, then take a look at the chart for the financials sector ETF (XLF), which has led the market this year and is clearly rolling over.

    I’ll tell you who the big winner in a Facebook IPOP will be. The San Francisco Bay area. $100 billion is a ton of money to pour into a single urban area. The issue is expected to create several billionaires and as many as 3,000 new millionaires in my neighborhood.

    The last time that happened was when Google (GOOG) went public, creating a wealth effect that never went away, taking the waiting list for a new Ferrari or Tesla out two years. Better buy real estate near Facebook’s Menlo Park headquarters, such as in Atherton, Palo Alto, and Mountain View. The bidding wars are about to begin!

    The Mad Hedge Fund Trader

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