Facebook Inc. (FB) plans to stop taking orders tomorrow for its initial public offering, two days ahead of schedule, according to a person with knowledge of the transaction.
Facebook will likely finish taking orders for the IPO after U.S. markets close May 15, said the person, who declined to be identified as the plans are private. The offer of 337.4 million shares at $28 to $35 each has been oversubscribed, according to people with knowledge of the matter, who declined to say by how much orders exceeded the amount of stock on offer. Jonathan Thaw, a spokesman for Facebook, declined to comment.
“They’re swamped with the orders that are in,” said Jon Merriman, chief executive officer at investment firm Merriman Holdings Inc. (MERR) in San Francisco. “They just need time to determine the price. They can send the message -- the books are closing, send in your orders now.”
The world’s most popular social-networking site, led by CEO Mark Zuckerberg, is seeking a market value of as much as $96 billion. At that level, Facebook would surpass United Parcel Service Inc. (UPS) as the most valuable company in history to go public in the U.S., based on market capitalization, data compiled by Bloomberg and Dealogic show.
Some institutional investors had balked at buying into Menlo Park, California-based Facebook over concern about the site’s growth prospects, people with knowledge of the matter said last week. In a Bloomberg Global Poll of more than 1,250 investors, analysts and traders, 79 percent said Facebook doesn’t deserve such a high valuation.
“Facebook’s pricing seems to be quite expensive,” said Yves Maillot, head of investments at Robeco Gestions SA in Paris, who helps oversee $6.8 billion. The IPO is also pressing ahead in a “very difficult environment for the U.S. equity market.”
The Standard & Poor’s 500 Index sank 1.1 percent to 1,338.35, the lowest level since February, as Greece struggled to form a new government amid mounting concern the nation may leave the euro. The index fell for a second day as financial companies and energy producers led losses among all 10 of its main industry groups.
Facebook initially planned to finish taking orders on May 17, data compiled by Bloomberg show. Its shares will list on the Nasdaq Stock Market under the symbol FB. Morgan Stanley (MS), JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) are the lead managers for the sale.
Zuckerberg is celebrating his 28th birthday today, during the final leg of a roadshow aimed at building demand for the IPO and convincing investors that Facebook can make money from mobile users.
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