Buoyed by the buzz surrounding the largest-ever tech IPO, a number of analysts have taken the bold step of initiating coverage on Facebook ahead of its offering, which is expected on May 18.
|Analysts are already flocking to cover Facebook .|
Wedbush Morgan analyst Michael Pachter, for example, initiated coverage of Facebook with an outperform rating and a $44 price target on Monday. "We look at what Facebook has as an asset, which is 900 million people and a ton of data on those people," Pachter explained, during an interview with CNBC.
"For advertisers, the company's advertising solutions provide a platform with a combination of reach, relevance and social context to engage with more than 901 million monthly active users," added Herman Leung, an analyst at Susquehanna Financial Group, in a note. The analyst predicts that Facebook will grow its revenue 40% to $5.19 billion in 2012, up from $3.71 billion in 2012. For 2013, Susquehanna expects 33% sales growth, to $6.9 billion.Leung did not slap a rarting or price target on Facebook just yet, although the analyst says that the company's recently-announced price range should resonate with investors. "We believe Facebook shares represent a compelling entry point based on the $28 to $35 per share derived by the recent filing range," he explained. Last week, in an amendment to its S-1 filing, Facebook said that it could raise as much as $13.6 billion from its offering. The $13.6 billion figure represents the maximum proposed size of the offering, which would reflect the sale of 388 million shares at $35 each. Excluding an over-allotment of 50.6 million shares, however, and assuming an IPO price of $31.50 a share, the midpoint of its range, Facebook would raise $10.6 billion. Facebook's offering will easily surpass Google's (GOOG) 2004 $1.7 billion IPO, up to this point the largest IPO from an American tech company. German semiconductor specialist Infineon Technologies, however, was another mega offering, raising $5.2 billion in its 2000 IPO. The chipmaker opted to delist from the New York Stock Exchange in 2009.
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