19 May 2012

Facebook sets share price

9:45 am on 19 May 2012

Facebook priced its initial public offering at $US38 per share ahead of one of the most eagerly-anticipated share floats in recent stock market history.

The price set on Thursday values the social network company at more than $US100 billion and would raise as much as $US18.4 billion.

Demand for shares which begin trading in New York on Friday is set to be high, but questions remain about the firm's ability to generate profits and take advantage of mobile phone platforms, the BBC reports.

There are also concerns that once the company has to answer to shareholders, there may be a greater emphasis on advertising to generate profits.

The shares on offer carry one vote per share whereas the current owners' shares carry 10 votes each.

Founder Mark Zuckerberg will hold just under 56% of the voting power of the company.

Mr Zuckerberg, who owns about 25% of the company, stands to gain the most from taking Facebook public.

Fellow founders Dustin Moskovitz and Eduardo Saverin will also become paper-billionares overnight, as will Napster founder and former employee Sean Parker.

US venture capital firm Accel Partners and Russian internet investment group Digital Sky Technologies also hold significant stakes in Facebook, while Microsoft and U2 frontman Bono also stand to make a huge profit on their investment in the company.

Facebook's 900 million users helped the company generate just $US1 billion in profit last year.