Facebook to file for $5B stock offering

The online social network Facebook was to file for a $5 billion public stock offering with U.S. securities regulators Wednesday, several news outlets reported. The filing -- half the $10 billion most analysts earlier estimated -- is a starting point Facebook has said could ultimately value the company at $75 billion to $100 billion. That valuation would be one of the largest initial public offerings in U.S. history, CNBC reported. The actual offering is expected to take place in late May, International Financing Review and The New York Times reported. Facebook was privately trading at $35.50 a share Tuesday at an implied valuation of $83.5 billion, the SharesPost private market for venture-backed private companies said. By contrast, the privately held Twitter online social networking and microblogging service traded at $18.50 a share, with an implied valuation of $9.8 billion to $10.6 billion, SharesPost said. The U.S. Securities and Exchange Commission will scrutinize Facebook's financial statements and potential public market investors will get a chance to see Facebook's books for the first time. The vast online social network, which claims more than 800 million users, was founded by entrepreneurial computer programmer Mark Zuckerberg with college friends in a Harvard dorm room. They launched it Feb. 4, 2004, almost eight years to the day before Wednesday's SEC filing. Facebook gave the Morgan Stanley financial-services firm the lead role in the public offering, letting it occupy the highly-desirable "lead left" slot on the IPO prospectus, IFR reported. That position means Morgan Stanley's name will appear in the upper-left-hand corner of the prospectus. It also typically means Morgan will receive higher fees than the other underwriting banks, Time magazine said. The other banks are Goldman Sachs Group, Bank of America's Merrill Lynch wealth-management division, Barclays Capital and JPMorgan Chase, IFR said. Morgan's experience in arranging major Internet IPOs -- including for the Groupon deal-of-the-day Web site and the Zynga social-network game developer -- helped it win the top spot after an unusually secretive selection process, IFR said. Morgan may have also won out because Facebook was displeased with Goldman's botched $1.5 billion private placement in the company's shares in January 2011, in which the bank ran afoul of SEC rules and was forced to close the offering off to U.S. investors, Time said, citing previous reports. Facebook has become the No. 1 U.S. place for online display advertising, with 28 percent of all online display ads, the comScore market research firm says. Yahoo is No. 2, with less than half that share.