Mike Isaac

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The Verdict Is In: Facebook Share Price Set at $38

Ladies and gentlemen, we have a number.

Facebook shares will trade on the Nasdaq exchange for the first time at $38 per share on Friday morning, valuing the world’s largest social networking Web site at $ 104.12 billion.

At $38 a share, Facebook would raise $16 billion in the offering. The company could sell an additional 63 million in over-allotments if underwriters see the demand (which they probably will).

Facebook initially set its sights on a $28 to $35 price range, but the company steadily raised the target amid growing investor fervor for the largest technology compay IPO in history. Earlier this week, in an amended S-1 SEC filing, the company estimated its share price to be in the $34 to $38 range. The final share price will settle at the top of the estimated range, though not over.

Facebook’s offering debuts after a year replete with hot tech IPOs from Zynga, LinkedIn and Groupon. Facebook’s trumps every other. Google’s was the largest IPO in tech history when it raised $1.67 billion in August of 2004. Last year, Zynga raised $1 billion.

But many things about Facebook ramping up to its Nasdaq debut were far out of the norm for tech company IPOs. To kick off its traveling pitch to institutional investors last week, Facebook put together an extravagant, well-produced roadshow video complete with a full explanation of the company’s advertising business, the meat and potatoes of Facebook’s revenue engine. And in celebration of the IPO, the company will host an all-night hackathon at its Menlo Park headquarters on Thursday evening in order to ring in $FB’s debut “the hacker way.”

The mammoth IPO comes despite initial reports of investor reservations about said revenue engine, and General Motors’ ill-timed announcement earlier this week that it would pull its $10 million in ad spend that it reserves for Facebook, citing that the advertisements just weren’t working.

Shortly thereafter, Facebook increased the amount of shares offered to investors on Friday by nearly 25 percent.

CEO Mark Zuckerberg will be selling close to $1.2 billion in shares at the time of the IPO — for tax purposes, he says — though he still holds more than 580 million voting shares, maintaining a firm grip on complete control over the direction of his 8-year-old company.

It’s official: $FB has arrived.


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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus