Swarm of investors crave 'more shares than Facebook is selling'
Whose IPO is oversubscribed? Mine ... bitch
Facebook's IPO is already oversubscribed with too many investors eyeing up more shares than those available, according to a well-placed source.
The rumour emerged as the Nasdaq said it expects a jump in the number of companies going public on the coattails of the social network's market buzz.
A mole whispered to Reuters that there is an overload of interest in Facebook's stock. A spokesman for Mark Zuckerberg's website declined to comment to The Register, blaming the quiet period before an Initial Public Offering when the firm is not allowed to promote itself.
Facebook has priced shares between $28 and $35, and if demand is high enough to reach that top end, the company will bag about $11.8bn (£7.3bn) by going public. And if the buzz reaches a suitably feverish pitch, Facebook may consider hiking that price.
Investors stung by the previous dot-com bubble burst have been wary of online-only stocks, but Facebook changed all and raised a record-breaking mountain of cash - despite concerns that growth for the network is slowing and it hasn't yet found a way to monetise the move to smartphones.
In fact, the coming-out party has generated so much excitement, Nasdaq OMX Group is expecting the IPO to encourage other companies that have been holding back in the wake of the global financial crisis to make the leap.
There are already 109 firms in the public offering pipeline for this year, and Brian Aust, executive VP at Nasdaq's Global Corporate Client Group, reckons that 200 to 300 more could go public in the next 6 to 12 months.
"Facebook is obviously the most anticipated IPO in history and once that IPO comes out, I'm sure we'll see several companies look to take advantage of that market," Aust said in a presentation to analysts heard by Reuters.
And many of the companies he's expecting are sitting in Silicon Valley.
"I go out there pretty much every other week because it is a huge opportunity when we look at what's going on with social media, what's going on with Apple and the applications and the ecosystem that is being created by that, and the gaming industry that is being created by social media," he said. "There is just tremendous opportunity and we're meeting 20 or 30 companies a week."
Although things are looking golden for Facebook at the moment, it still has a few hurdles to clear in the next six months. The social network hopes to close its $1bn acquisition of photo-sharing app Instagram in the second quarter, but that may be a bit soon for the Federal Trade Commission.
The FTC automatically investigates any merger or acquisition that is valued at more than roughly $70m.
This probe shouldn't have any effect on Facebook's IPO, but if the FTC isn't happy with the Instagram deal by Q2, the social network will have to delay the buy-up or the IPO itself in case the commission has an adverse effect on its fledgling shares.
Facebook had not returned a request for comment on the FTC's investigation at the time of publication. ®