Dueling Reports As Facebook IPO Is One Week Away

By David Cohen 

Is demand for Facebook’s May 18 initial public offering far lower than initially expected among institutional investors, or is the IPO already oversubscribed exactly one week before hitting the market? The answer depends on what you read.

If you turn to Bloomberg for your business news, the buzz is that institutional investors are concerned about the social network’s growth prospects, and that Facebook executives are telling analysts the company’s most optimistic sales projections may be out of reach.

Bloomberg also cited a poll of 1,253 of its subscribers who are investors, analysts, and traders, saying that 79 percent of them believe that $96 billion, the high end of the projected value range for Facebook, is too high.

Mitsuo Shimizu, a market analyst at Tokyo-based Iwai Cosmo Securities, told Bloomberg:

Expectations on Facebook are way too high. Given its fundamentals, the company doesn’t look anywhere cheap in valuation.

Bloomberg did say, however, that robust demand from retail investors could offset the lukewarm reception thus far from institutional investors.

Speaking of robust demand, a source familiar with the IPO told Reuters it is already oversubscribed, saying institutional investors have indicated demand for more than the 337.4 million shares that are being made available — 180 million from the company, and the other 157.4 million from stockholders.

Reuters added that a large institutional investor placed a substantial share order Wednesday and was attempting to acquire more shares by calling syndicate desks.

Readers: Is Bloomberg right? Is Reuters right? Or is the answer somewhere in between? We have seven days to find out.

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