Facebook Inc was previously expected to raise 10 billion from it’s IPO, given it’s valuation of around 100 billion. However, according to several major news agencies today, Facebook has cut the number of shares offered – and hence the total amount of cash that the sale of those shares will raise – by half.
Facebook is expected to submit paperwork to the U.S. Securities and Exchange Commission (SEC) regulators tomorrow morning for a $5 billion initial public offering with Morgan Stanley in the lead left role and four other book-runners handling the mega-IPO.
There is widespread speculation on why Facebook would make such a move, but most industry investors agree that Facebook is trying to be conservative and drum up demand for it’s stock by limiting the supply. We will have more details on the IPO itself within the next 24 hours, when Facebook would’ve already filed the papers with the SEC and a lot more information would become public. Stay tuned.