Psst. Wanna piece of Facebook?

Facebook - the world's biggest social network - is going public. The Silicon Valley company started by Mark Zuckerberg in his Harvard dorm room eight years ago has filed the papers required to raise money from prospective shareholders. Here are five things you need to know about the most-anticipated IPO of 2012.

What is an IPO?
An IPO – or Initial Public Offering – is the process by which a privately-held company goes public and trades on a major stock exchange. It’s a lengthy process involving investment banks, securities regulators, and institutional investors.

By going public, a company can raise a lot of cash. It also allows a company to get better rates when they issue debt and issue stock, which can make acquiring other companies a little easier because some of the stock can be part of a deal.

Issuing stock can also make it easier to attract the best talent to a company because the company can offer those people stock options – or a piece of the action.

How long before I can buy Facebook shares?
Once the IPO papers are filed, there’s a “cooling off” period while regulators go over the documents to make sure they satisfy all the requirements. That could take three or four months.

Can I get a piece of the IPO?
Sure, if you run a large pension fund (we’re talking managing billions of dollars), are a large institutional investor or have friends in high places in the investment banks handling the offering.

The name of the IPO game is making as much money all around as possible – for the company and for the investment banks handling the offering.
The only way to get shares is to have an account with one of the investment banks involved in the IPO.

Facebook is looking to raise about $5 billion, making it the largest Internet IPO since Google raised $1.4 billion in 2004. The offering could generate fees of as much as $500 million for the investment banks. Those banks will want to go to their best institutional customers to do that. They’d much rather offload millions of shares in one shot, rather than a hundred shares a pop to a million people looking to stick something in their retirement accounts.

What will the stock price to be?
That all depends on what the company’s worth. Stock price is a “managed” number. A company can make it come out to anything just by issuing more or fewer shares for the same chunk of the company.

If Facebook is looking to raise – say - $5 billion, the investment bankers could issue 50 million shares at $100 each. Or they could offer 100 million shares at $50 each.

At $50 a pop, more people might think it’s an affordable investment for their accounts. At $100 a share, investors might feel they’re getting a chunk of a high quality company and that the share price will probably go higher. Apple’s trading at around $450 a share. Google’s closing in on $600 a share.

Should I get in as soon as possible?
That’s a question only you can answer. But let’s look at one IPO that got this country buzzing just a few years ago. Canada’s iconic coffee and doughnut chain Tim Hortons went public in 2006.

In the days and weeks leading up to the IPO, it was rumoured that the price would be between $21 and $23 a share. Demand from retail investors was said to be so high, the brokerages involved decided to set the opening price at $27 a share.

That first day of trading saw so many shares change hands – for the most part institutional investors getting out while the public bought in – that the price went as high as $37 before settling in at a close of around $33.

The next several months saw many ups and down, but the price remained below the IPO price of $27. If you got discouraged and got out, you made a mistake. However, if you were patient and waited until the dust settled to get in, you did even better.

Timmie’s share prices almost double-doubled eventually to trade above $50 a share briefly. It’s around $47 a share now. And the company has also increased the dividend several times.