The Economist, Editorial
OUTSIDE Facebook’s vast new headquarters in Silicon Valley is a huge sign with an image of a hand on it giving a thumbs-up sign. A tiny digital version of the same hand sits on millions of websites and invites Facebook’s 900m or so users to click on it to share content they have found with their pals. Now Facebook is hoping to get another big thumbs-up when it stages its eagerly awaited initial public offering (IPO) of 12% of its equity on America’s NASDAQ stockmarket on May 18th. Assuming all goes according to plan, the flotation will be the largest yet undertaken by an internet company.
On a roadshow across America to promote the listing this week, Mark Zuckerberg, Facebook’s 27-year-old boss, and other executives were treated like rock stars. Long queues snaked out of hotels where they were holding meetings, as investors lined up to hang on their every word. Hordes of photographers rushed to take pictures of Mr Zuckerberg, in his trademark hoodie, as he and his colleagues were whisked off to waiting limousines.
This frenzy is further proof, if any were needed, that Facebook has become a global internet idol. Facebulls reckon the flotation, which could raise almost $12 billion (with about half going to shareholders selling up), will help transform the social network into a web powerhouse in the same way that Google used the riches from its 2004 IPO to spread its tentacles across the web. And they confidently predict that Facebook’s shares will start trading well above the range of $28-35 that the firm has set for them—a range that would value Facebook at $77 billion-96 billion. ( According to press reports, Facebook has increased the price range to $34 to $38 a share. At the upper end of that range the company would be worth $104 billion.) [MORE]