Facebook lifts price range for $100bn IPO

The social network had been targeting between $28 and $35 a share, valuing the company at up to $96bn, but has now raised its top-end ambition to $104bn after being inundated with requests for its shares from potential investors.

Facebook will sell 337.4m shares in its IPO on Thursday, marking the biggest technology flotation in history and immediately catapulting Facebook ahead of companies like Disney and Ford in valuation terms.

The value of the company is expected to surge even higher when trading in its shares start on the Nasdaq stock exchange on Friday, under the ticker FB, despite concerns about its long-term business model.

Nearly two thirds of Americans who actively invest in the stock market think Facebook would be overvalued at $100bn, according to a poll by CNBC and the Associated Press. Billionaire Warren Buffett, arguably the world's most succesful investor, has said he will not be buying shares in the company.

Nonetheless, Facebook's IPO was already oversubscribed last week, leaving some institutional investors that had placed large orders scrabbling around syndicate desks for more shares so they could increase their stakes.

Some of the social network's underwriters were reportedly closing their books early on Tuesday because they had no shares left to sell.

Facebook's road show, which got underway last week, appears to have overcome anxieties over its corporate governance and potential growth.

The social network warned last week that the surge in people accessing Facebook on their mobiles is threatening the company's long-term financial prospects, because it has not yet worked out how to monetise that usage.

Mr Zuckerberg, who founded Facebook from his bedroom at Harvard, ruffled feathers by wearing a "hoodie" sweater on Facebook's roadshow. He has turned down an invitation to go to ring the Nasdaq bell in New York on Facebook's first day of trading - opting to ring it remotely from Facebook's Cupertino headquarters instead.

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USD Rallies after April Producer Price Index Falls for the First Time in 4 Months

Wholesale price fell for the first time in four months in April on remarkable declines in energy costs, suggesting an easing inflationary pressure on the U.S. production line. THE TAKEAWAY:U.S. April Producer Price Index Declined 0.2%> Easing Inflationary Pressure might Encourage Additional Stimulus >USD Rallies vs. its Major Peers

Wholesale price fell for the first time in four months in April on remarkable declines in energy costs, suggesting an easing inflationary pressure on the U.S. production line.

The seasonally adjusted Producer Price Index for finished goods unexpectedly fell 0.2 percent in April after being flatted in March and jumping 0.4 percent in February, the U.S. Bureau of Labor Statistics reported today. Meanwhile, economists surveyed by Bloomberg News had anticipateda print that was unchanged from the previous reading.From a year earlier, wholesale pricesrose 1.9 percent, below 2.1 percent gaininitially estimated and also the weakest reading since October 2009.

In contrast, the less volatile index, excluding food and energy, rose 0.2 percent last monthin line with consensus forecast, marking the sixth consecutive monthly gain. On a yearly basis, the so-called core producer price index surged2.7 percent compared with 2.9 percent in the previous month.

The April decrease in finished good index was resulted from 1.4 percent decline in prices for finished energy goods, the largest decline since October 2011. Similarly, the index for intermediate materials, supplies and components edged down 0.5 percent, the first fall since December 2011. The fall is attributable to 2.7 percent decrease in prices for intermediate energy goods. The index for crude materials for further processing also tumbled 4.4 percent in the month due to the broad based declines in prices for crude energy materials (-6.8%), crude foodstuffs and feed stuffs (-3.5%) and crude nonfood materials less energy (-1.8%).

AUDUSD 1-minute Chart: May 11, 2012

Chart created using Strategy Trader – Prepared by Trang Nguyen

U.S. dollar immediately gains ground versus most of its major peers in the minutes following the Producer Price Index release. As seen on the 1-minute AUDUSD chart above, the greenback rallied 30 pips versus the Australian dollar from $1.0055 to 1.0025. At the time this report was written, the greenback advances 0.56 percent, trades at $1.0026 per aussie.

--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com

To contact Trang, email tnguyen@dailyfx.com

DailyFX provides forex news on the economic reports and political events that influence the currency market.
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