Facebook IPO has markets buzzing

Excitement about Facebook's stock market listing is growing with the world's largest social-networking service expected to file for its initial public offering in the next few days, sources with knowledge of the matter said.

The company was discussing a valuation of up to US$100 billion ($121.8 billion), said two people, who asked not to be identified because the plans haven't been made public. Timing for the filing was still being discussed and might change, they said.

The IPO would provide funds to help Facebook maintain its expansion and fend off competition from internet rivals such as Google and Twitter.

The company had discussed raising US$10 billion in the offering, a source said in November.

Anupam Palit, an analyst at GreenCrest Capital Management in New York, said Facebook might set its price at the low end of the valuation range to entice investors and ensure the stock rose after the IPO.

"They might discount it a little bit in order to make sure the first couple of days of trading are very strong."

The Wall Street Journal has said Facebook is close to hiring Morgan Stanley to handle the deal and Goldman Sachs Group will probably play a "major role" in the IPO.

It said Facebook could file its paperwork as early as the coming week.

Facebook declined to comment, as did representatives of Goldman Sachs and Morgan Stanley.

Shareholders of Facebook faced a three-day suspension of trading on secondary markets that lasted through Saturday, said the sources.

Although buy and sell orders could be made, transactions wouldn't be processed by Facebook's lawyers at Fenwick & West, the people said.

Halting the trading, which had allowed employees and early stakeholders to buy and sell shares, didn't mean the filing was imminent, the sources said.

But some companies suspend trading before a filing to make sure investors can't exchange shares until all of the information is public.

A trading halt also may represent an effort by private companies to see how many shareholders they have.

Co-founded by Mark Zuckerberg in 2004 in a Harvard University dorm, Facebook has more than 800 million users with an easy-to-use website that lets anyone with an internet connection build profile pages, post video and photos and interact with friends.

The company has nudged aside competitors such as MySpace.

Facebook would follow a flurry of social-media companies holding IPOs last year, the biggest year for US internet offerings in more than a decade. Nineteen companies raised US$6.6 billion - the most since 2000, when 101 businesses raised US$11 billion.

Professional-networking site LinkedIn, music-streaming service Pandora Media, daily-deal site Groupon and social-gaming company Zynga all sold shares last year.

Facebook expects to be required by US regulators to disclose financial results by April 30, if it doesn't go public by then, according to the company last year when it announced an investment from Goldman Sachs and other backers. The $1.5 billion investment valued the company at US$50 billion.

- BLOOMBERG

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