CNBC reported that investors could see the Facebook IPO priced by May 16 or 17, and start trading the next morning, according to an anonymous source familiar with the matter. The social media giant filed for its IPO Feb. 1.
If this timeline comes true, Facebook will start marketing the deal May 7.
A possible IPO delay could stem from Facebook's new $1 billion purchase of photo-sharing network Instagram. The U.S. Securities and Exchange Commission has to review the deal and could approve as early as the end of April.
If the Instagram deal takes longer than expected to approve, Facebook could hold off pricing until May 23 or 24, CNBC reported.
The Facebook road show is expected to last about 10 days, focusing on potential investors in New York, Silicon Valley and Boston, according to the source.
Instagram Deal is Facebook's Biggest
Facebook announced Monday it would pay $1 billion in cash and stock for photo-sharing app maker Instagram.
The Instagram deal is Facebook's biggest ever in both price and reach. Instagram has more than 30 million active users — which it accumulated in just 18 months — the most of any startup that Facebook has bought.
"We don't plan on doing many more of these, if any at all," Facebook CEO Mark Zuckerberg wrote in a blog post Monday, speaking to the size and scope of the deal. "But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together."
This new integration will make Instagram much more popular with Facebook's 800 million subscribers. Posting photos on Facebook that were taken via Instagram is not currently user-friendly, only showing a small thumbnail and link when users share pictures.
This deal will be different than previous ones Facebook has entered, according to those involved. Instead of Facebook taking over the Instagram resources, it will allow the company to develop with limited interference.
"We're committed to building and growing Instagram independently," said Zuckerberg. "Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people."
Facebook had no comment as to why it chose Nasdaq. The news was reported in The New York Times citing an anonymous source.
Based on a $5 billion offering, Facebook will be the largest in Nasdaq's history.
Nasdaq is home to many popular tech stocks, and the addition of the long-awaited Facebook listing will cement its position as the favored exchange for big names in U.S. tech.
Now Nasdaq will enjoy association with one of the hottest companies hitting the markets in years. Facebook now has reached more than 800 million users and $3.7 billion in revenue.
Nasdaq also will get healthy boost in revenue and trading fees.
"There's cachet to winning one of the biggest IPOs ever," Tim Hoyle, the director of research at Haverford Trust Co., which manages $6 billion including NYSE shares, told Bloomberg News. "The straight- up value of this IPO will make for a nice gain in listing fees, which make up a meaningful portion of the revenue stream for exchanges."
News and Related Story Links:
- Money Morning:
Facebook (NASDAQ: FB) Scores Big with Both AOL Patent Sale and Instagram Deal
- Money Morning:
Sorry, NYSE: Facebook (NASDAQ: FB) Will Trade on Nasdaq
- CNBC: Facebook Eyes IPO Dates of May 17 or May 24
Facebook acquires Instagram for $1 billion
- Bloomberg News:
Nasdaq Said to Win Facebook Listing in Win Over NYSE