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IPO talk: Facebook's pvt shares soar

Facebook is being valued at more than $33 billion as investors try to secure a stake in the social networking site in anticipation of its flotation on the US stock market.

business Updated: Aug 27, 2010 22:42 IST

Facebook is being valued at more than $33 billion as investors try to secure a stake in the social networking site in anticipation of its flotation on the US stock market.

The latest data shows that shares in Facebook are changing hands for up to $76, more than double their value at the start of this year. While Facebook is still privately held, shareholders are able to sell the company's stock through "secondary market" trading.

By buying at these prices, some investors are calculating that Facebook is worth more than eBay or Dell, or nearly twice as much as Yahoo!

Secondary market trading can inflate the value of a private company, as the relative scarcity of its shares may encourage a buyer to overpay.

But with founder Mark Zuckerberg thought to be planning to float Facebook in the next couple of years, there is already strong interest in what would be the tech sector's biggest IPO since Google went public six years ago.

Facebook is expected to earn about $1.3 billion of advertising revenue this year, a figure that is tipped to rise sharply to $1.8 billion in 2011.

Facebook attracted its 500 millionth user last month. It is also benefiting from the smartphone boom across the world.