Facebook looking at price of $38 a share for IPO

Justin Sullivan / Getty Images file

Facebook CEO Mark Zuckerberg's shares in the company will likely be worth $19 billion at the time of the initial public offering.

By Roland Jones

Facebook was?on the verge of going public Thursday at $38 a share, raising more than $16 billion in a landmark public offering that would value the company at more than $100 billion.

Investment banks organizing the?stock offering were expected to set the price at top end of the range of $34 to $38 per share estimated by the company in a filing this week. Shares would begin trading publicly on the Nasdaq stock market Friday under the symbol "FB."

The Wall Street Journal reported the price would be set at $38 but said the figure was still subject to negotiation and could change.

At $38 a share the offering would value the eight-year-old company at $104 billion, a record for a company making its stock market debut. The offering will raise more than?$16 billion for Facebook and selling shareholders, including CEO Mark Zuckerberg, and ultimately could raise up to?$18.4 billion, assuming underwriters exercise their option for "overallotments" to meet strong demand.

The IPO will leave Zuckerberg in control of the company, with 56 percent of the voting shares, and make him fabulously wealthy in the process, with a stake valued at some $19 billion.

Valentin Flauraud / REUTERS

The loading screen of the Facebook application on a mobile phone is seen. Shares of the company that started out in a Harvard dorm room are expected to start trading on the Nasdaq Friday.

Other?early investors in Facebook also will make a killing.

For example, Peter Thiel, the venture capitalist who sits on Facebook?s board of directors, invested $500,000 in the company back in 2004. He?s selling nearly 17 million of his shares in the IPO, which means he'll get some $640 million.

Related: Who?s gonna get rich on the Facebook IPO?

The sky-high valuation of Facebook puts it a bit ahead of Web veteran Amazon.com, which has more than 10 times Facebook's $3.7 billion in revenue. But Facebook is growing quickly and posted $1 billion in profits last year, more than Amazon's $631 million.

For individual investors, who will get their chance when Facebook begins trading Friday, investing in the company could be a risky bet, said Jay Ritter, an IPO expert and Cordell Professor of Finance at the?University of Florida.

?My concern with Facebook is that at the valuation that public market investors are going to be buying in at there?s very little upside potential left,? he told CNBC.

But, he added, it doesn?t necessarily follow that Facebook is overvalued.

?The bullish case for Facebook is, as Google has demonstrated, targeted search can be an extremely profitable business, and Facebook has that franchise with social networks and it?s a very defensible business model,? Ritter said.

Related: Want a piece of Facebook? Here's what you need to know

In a regulatory filing issued Wednesday, Facebook said it expects to sell as many as 421.2 million shares,?up from a previous maximum of 337.4 million. The company is selling 180 million shares, raising an estimated $6.8 billion for general business use. The rest of the shares are being sold by early investors and company insiders who are cashing out.

An additional 63.2 million shares?could be sold to cover the overallotments.?

The Assoctiated Press contributed to this report.

CNBC's Kayla Tausche shares final thoughts on Facebook ahead of its IPO.

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Facebook's marketing payoff: Reality or fantasy?

Is Facebook worth the price? Analysts split

A non-investors guide to Facebook's IPO

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