25% more Facebook shares on offer

Published:  17 May at 6 PM

As reported by the BBC, in response to strong demand, social network Facebook has announced plans to sell 25 percent more shares than initially planned in its flotation.

The decision comes one day following the company’s announcement that it would raise its share prices by 21 percent, increasing it to between $34 to $38 per share. The move also comes in the face of doubts on the profitability of the networking site, which is mainly used for social updates.

General Motors added to these doubts when it said it would no longer advertise its vehicles on the site. However, competitor Ford announced it would carry on its social media strategy.

A company cannot “buy” its way into Facebook, said a spokesman. There needs to be a credible presence and people need to see the company doing innovative things, he added.

Facebook plans to add around 84 million shares to its initial public share offering, or IPO, and plans to sell around 421 million stakes, a rise from 337 million—making around $18 billion.

However, this is still just a small portion of the entire firm, and implies that the social network’s full market value is close to $100 billion, similar to web shopping giant Amazon.com.