WINDERMERE, Fla. ( Stockpickr) -- The excitement is building ahead of the much-anticipated Facebook (FB - Get Report) IPO. For a trader like me, this is like Christmas! Shares of Facebook have the potential to spike big time on its debut, and the derivative and sympathy plays should also see some hot action.
The biggest news of late on this hot IPO is that Facebook plans to increase the size of its initial public offering by almost 25% to 420 million shares, so it could raise as much as $16 to $20 billion due to strong demand for the stock. In addition, on Monday news broke that the initial pricing from the underwriters has risen sharply, from $28-$34 to $34-$38. That would make Facebook the fifth-largest U.S. IPO ever, according to IPO research and investment firm Renaissance Capital.
As a trader, I don't love that Facebook is increasing the float right before its IPO debut. The lower the float, the higher the chance this stock can pop huge if demand is truly as high as some are anticipating. Remember when LinkedIn (LNKD - Get Report) came public? LinkedIn didn't bring anywhere near 420 million shares to the market for its IPO, and the stock more than doubled on its trading debut. To put things into perspective, LinkedIn's float right now is just 60 million shares.