On Tuesday, with investors lining up for an opportunity to get their hands on its stock, Facebook (News - Alert) increased the target price range for its upcoming initial public offering (IPO). The social network now expects shares to begin selling between $34-$38, up from the original IPO range of $28-$35 per share.
The new target range values the company between $92 billion and $103 billion, according to the Wall Street Journal.
The last-minute increase isn't all that surprising considering the overall interest level in Facebook's IPO road show -- the two-week-long series of meetings that soon-to-be-public companies embark on before the IPO date to privately relay their strategy to potential investors. One source close to the matter told CNN Money that the response has been "nothing short of pandemonium."
Another reason not to be surprised by the increased target range is the recent history of tech IPOs. Companies in similar positions to Facebook often set a rather conservative initial range to drum up interest in the stock, and then increase that range late in the game to keep the momentum moving forward. It wouldn't be all that shocking to see Facebook boost its target range one more time before the tentative IPO date of May 18. Newly-public Web firms like Pandora (News - Alert) and Russian search engine, Yandex followed similar strategies for their own IPO.
Investor fervor over Facebook's IPO as it continues to mount in the face of what some analysts are calling troubling signs for the social networking giant. Obliged to hand over its financials to the SEC (News - Alert) before going public, Facebook issued less-than-inspiring first quarter results earlier this month. The company posted revenue of $1.058 billion, up 46 percent annually, but down six percent from the previous quarter.
The report ends two full years of sequential growth for Facebook, which saw its profit shrink to $205 million, down 12 percent sequentially. The numbers could raise legitimate concerns because Facebook actually increased its user base during the period in question, meaning the company's average revenue-per-user is gradually slipping.
Still, Facebook is finding no shortage of interested investors. Like other recent Web stocks, Facebook will most likely have a huge first day -- or even full week -- on the market. The question remains, however, how well the social network will perform over the long haul.