Facebook shares are about to be halted by the sound of it. A report from Bloomberg noted that Facebook has asked companies which participate in trading of Facebook shares to stop trading shares at the beginning of April. If so, sales this week will be the last sales. A trader has said that he was also told about the lock-up news from one of his private share exchange contacts.
The news is obviously for the cooling off of any valuation gaps ahead of Facebook’s formal initial public offering. With valuations having ranged around $75 billion and $80 billion, it is too soon to know what sort of formal price valuation will be given to Facebook when the IPO hits the market in the weeks ahead.
Our take is and has always been that CEO Mark Zuckerberg wants as close to a $100 billion valuation. There is not much logic as to why that number stands out other than that it is highly impressive. Either way, Facebook is likely to be a record-breaking IPO and it is expected to create many new overnight millionaires.
The IPO is expected to raise at least $5 billion, but it sure sounds as though Facebook is just going to have yet another limited share float of a company that has many shares not on the market that could have been on the market.
JON C. OGG