Facebook could raise $18 billion at IPO

After setting its share price at $38, Facebook is set to become the first U.S. company to be worth more than $100 billion at its debut. As the Financial Post reports, the social network could raise up to $18.4 billion on its initial public offering today on the Nasdaq Stock Market, an 18 per cent share of the company.

“It will be bananas,” Greencrest Capital analyst Max Wolff told the newspaper. “This is all about the future, so it really is a lottery ticket.”

Facebook’s valuation for its IPO is the third-highest ever, after two Chinese banks that went public in 2010 and 2006, Time Magazine reports.

But there is some skepticism about Facebook’s huge valuation, especially since it raked in $3.7 billion in revenue last year.

“A $104 billion market capitalization puts Facebook at more than 100 times its trailing earnings,” wrote John Constine and Kim-Mai Cutler for technology blog TechCrunch. “That’s a big multiple to live up to, and it will likely need to add bold new revenue streams to justify the mammoth valuation.”