Facebook IPO has been already oversubscribed

The Initial Public Offering (IPO) of Facebook is already oversubscribed, said for Reuters a source close to the process of listing, a few days after the largest social network in the world started a promotional tour throughout the U.S. Despite concerns about slowing growth, a high assessment and issues linked to revenues from mobile advertising, institutional investors have expressed a request of shares far beyond those available in the tender, said the source cited for Reuters.

Analysts say that Facebook, which aims to raise about $10.6 billion by selling 337 million shares at a price between $28 and $35, a price range that could increase if demand proves to be quite high. An important institutional investor placed a large order on Wednesday and made calls trying to purchase more shares, a second source told Reuters. Facebook declined to comment. The company controlled by Mark Zuckerberg is expected to start trading on May 18, after an IPO which makes the other technology companies in the industry look like a lot less important.

With 900 million users, Facebook compete with companies like Google or Yahoo for the time spent by users online and advertising revenue. But in the long term, analysts say that Facebook needs to find a way to earn money by increasing the number of users who have access to social network via mobile devices such as smartphones.

Federal Trade Commission (FTC) began an investigation to determine whether the Facebook acquisition Instagram took place legally. What impact does this investigation on acquisition and, especially, on Facebook’s IPO? The investigation conducted by the FTC could take up to 12 months, but without conclusive evidence, the IPO scheduled for next week will not be postponed, said James Brau, professor of finance at Brigham Young University, for Mashable. His opinion was shared by David Balto, a former director of the Commission, as he added that the investigation started by the FTC is rather a routine action of the institution undertaken whenever corporate transactions exceed $68 million.

When they applied for Facebook IPO, company representatives said that Facebook acquisition of Instagram might be completed by the end of the current quarter, but the FTC investigation will delay the purchase, given that it takes between 6 and 12 months for FTC to finalize the inquiry.