Imminent Facebook IPO to create 970 millionaires

Facebook's Initial Public Offering (IPO) is the largest ever in the technology world and in-depth analysis shows UHNWIs, (worth more than $30m), will earn over $225 a share, on average - though immediate cash flow will be restricted through stock options and other share restrictions.

WealthInsight analyst Andrew Amoils said: "This floatation will create an unprecedented number of new super-rich people. And despite the success of the film The Social Network and the company's media profile, no-one knows much about the Facebook Elite beyond the senior management leaders. That's why we have pulled out all the stops to research these individuals".

Some brokerages cease accepting Facebook IPO orders

Investors who have not already hopped on board the Facebook IPO bandwagon have now missed their chance, according to Reuters report earlier today. The world's most subscribed, and widely used, social network will go public before the end of the week and TD Ameritrade and Fidelity's brokerage arm both halted orders of Facebook shares as of Tuesday evening.

Sources from Morgan Stanley & Co admitted they have followed suit, as well as E*Trade Financial and Wells Fargo Advisors, who both stopped accepting orders at 4pm sharp on Tuesday.
"It was a mad scramble," a Morgan Stanley adviser said. The adviser had less than two days to contact clients to see if they were interested in Facebook and go through the "extensive paperwork." Several clients missed out because they failed to submit their paperwork by the Tuesday evening deadline.

A closer look at Facebook's IPO figures

At the point of going public, Facebook can boast almost a billion users and are just shy of $4bn in annual revenue. Trading on the NASDAQ as 'FB', the social network is eyeing a sale of 337.4 million shares, priced between $28 and $35 per share - raising between $9-12bn, according to WealthInsight's white paper.

After Facebook's recent purchase of Instagram, their total shares have been estimated at 2.74 billion, including all options and restricted stock units. The anticipated market cap of between $77bn and $96bn is about one sixth of Apple's, a third of Microsoft's and just below half of Google's.

Facebook's IPO has been labelled by some corners as overpriced, but its expected share price will value the company between 79 and 99 times the company's earnings - much higher other tech companies such as Apple (13.7x) and Google (18.6x), although not as high as Linkedin (695x).

Even if the IPO is overpriced, the company remains highly valuable with $972m earnings over 12 months up to March 2012, out of $4bn gross revenue. According to WealthInsight, if Facebook is able to further boost revenue and maintain this same level of profitability, then wider support for this high valuation should be seen.