Facebook warnings fail to dissuade investors
Sunday 13 May 2012
Facebook is on track for technology's biggest flotation this Friday, despite two huge setbacks for the social network.
The planned $13.6bn (£8.5bn) New York listing could see the $3.7bn-revenue company worth more than $100bn.
Last week it issued what was effectively a profit warning for its second quarter by revealing it is struggling to make money from access on mobile phones. It also emerged that its $1bn purchase of photograph-sharing app Instagram will be delayed by an unexpected competition investigation in the US.
Nevertheless, Facebook's recent cross-country roadshow to drum up US investors seems to have paid off, with reports of the stock being oversubscribed by institutional investors.
Shares are set to float at between $28 and $35 each, valuing the social network at up to $96bn. But US sources have said that investors want to buy more than the 337 million shares that will be available on Thursday – which could push the firm's value to more than $100bn.
The company that began life in Mark Zuckerberg's dorm room now has more than 900 million users. However, it has become comercially more savvy since Sheryl Sandberg joined in 2008.
Diving in at the deep end is no excuse for shirking the style stakes
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