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Facebook expects IPO to value the company as high as $95bn

04 May 2012

Facebook expects its upcoming initial public offering (IPO) to value the company at up to $95bn – the highest valuation ever for a technology firm.

The figures were disclosed in a regulatory filing, which also revealed that the firm could raise as much as $13.6bn in its IPO – although half of that will go to existing shareholders.

The figures will be raised due to the firm revealing that it plans to set the price for its shares at between $28 and $35 each.

The long-awaited IPO has generated huge excitement in the technology industry and its performance is likely to influence other firms mulling over an IPO.

Facebook executives will now spend the next two weeks talking to investors, attempting to generate further enthusiasm for the IPO.

Facebook is believed to have alighted on 18 May as its IPO date.

The record valuation could store up problems for Facebook in the longer term, warned Angela Eager, an analyst with market watchers TechMarketView.

“We think that Facebook is a great company. But we fear that the valuation will leave nothing for new shareholders over the medium term,” she said.

Facebook faces stiff competition from the likes of Google, Microsoft and Apple and it has yet to nail a convincing mobile strategy, she added. That could mean there's limited opportunity for its price to rise in line with shareholders' expectations.

The previous highest figure for a tech IPO was the $1.9bn raised by Google in its 2004 IPO, which valued the firm at $23bn.

Since then, Google has been able to grow its business further, and is today worth roughly $200bn.

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